area handbook series 

Nicaragua 

a country study 



Nicaragua 

a country study 

Federal Research Division 
Library of Congress 
Edited by 
Tim L. Merrill 
Research Completed 
December 1993 





On the cover: The almost perfectly shaped cone of 
Momotombo, one of the many active volcanoes in 
western Nicaragua 



Third Edition, First Printing, 1994. 

Library of Congress Cataloging-in-Publication Data 

Nicaragua: a country study / Federal Research Division, 
Library of Congress ; edited by Tim Merrill. — 3rd ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) 
(DA Pam ; 550-88) 

"Supersedes the 1982 edition of Nicaragua: A Country 
Study, edited by James D. Rudolph." — T.p. verso. 

"Research completed December 1993." 

Includes bibliographical references (pp. 251-269) and 
index. 

ISBN 0-8444-083 1-X 

1. Nicaragua. I. Merrill, Tim 1949- .II. Library of 
Congress. Federal Research Division. III. Series. IV. 
Series: DA Pam ; 550-88 

F1523.N569 1994 94-21664 
972.85-dc20 CIP 



Headquarters, Department of the Army 
DA Pam 550-88 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared 
by the Federal Research Division of the Library of Congress 
under the Country Studies/Area Handbook Program spon- 
sored by the Department of the Army. The last two pages of this 
book list the other published studies. 

Most books in the series deal with a particular foreign coun- 
try, describing and analyzing its political, economic, social, and 
national security systems and institutions, and examining the 
interrelationships of those systems and the ways they are 
shaped by cultural factors. Each study is written by a multidisci- 
plinary team of social scientists. The authors seek to provide a 
basic understanding of the observed society, striving for a 
dynamic rather than a static portrayal. Particular attention is 
devoted to the people who make up the society, their origins, 
dominant beliefs and values, their common interests and the 
issues on which they are divided, the nature and extent of their 
involvement with national institutions, and their attitudes 
toward each other and toward their social system and political 
order. 

The books represent the analysis of the authors and should 
not be construed as an expression of an official United States 
government position, policy, or decision. The authors have 
sought to adhere to accepted standards of scholarly objectivity. 
Corrections, additions, and suggestions for changes from read- 
ers will be welcomed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-5220 



iii 



Acknowledgments 



The authors would like to acknowledge the contributions of 
Jan Knippers Black, Jack Child, Mary W. Helms, Julian C. 
Heriot, Jr., and Richard L. Millet, who wrote the 1982 edition 
of Nicaragua: A Country Study. The present volume incorporates 
portions of their work. 

The authors are grateful to individuals in various govern- 
ment agencies and private institutions who gave of their time, 
research materials, and expertise in the production of this 
book. These individuals include Ralph K. Benesch, who over- 
sees the Country Studies — Area Handbook Program for the 
Department of the Army. None of these individuals, however, is 
in any way responsible for the work of the authors. 

The authors also would like to thank those people on the 
staff of the Federal Research Division who contributed directly 
to the preparation of the manuscript. They include Sandra W. 
Meditz, who reviewed drafts, provided valuable advice on all 
aspects of production, and conducted liaison with the sponsor- 
ing agency; Marilyn L. Majeska, who managed editing and pro- 
duction; Andrea T. Merrill, who edited figures and tables; 
Barbara Edgerton and Izella Watson, who did word processing; 
and Stephen C. Cranton and David P. Cabitto, who prepared 
the camera-ready copy. In addition, thanks go to Sharon 
Schultz, who edited chapters; Beverly Wolpert, who performed 
the final prepublication editorial review; and Joan C. Cook, 
who compiled the index. Thanks also go to David P. Cabitto of 
the Federal Research Division, who provided valuable graphics 
support and who, along with the firm of Greenhorne and 
O'Mara, prepared the maps; and to Wayne Home, who did the 
cover art and chapter illustrations. Finally, the authors acknowl- 
edge the generosity of the individuals and the public and pri- 
vate agencies who allowed their photographs to be used in this 
study. 



v 



Contents 



Foreword iii 

Acknowledgments v 

Preface xiii 

Country Profile xv 

Introduction xxv 

Chapter 1. Historical Setting 1 

Marisabel Bras 

PRECOLONIAL PERIOD 4 

COLONIAL PERIOD, 1522-1820 6 

The Spanish Conquest 6 

Colonial Rule 8 

NINETEENTH CENTURY 11 

National Independence, 1821-57 11 

Foreign Intervention, 1850-68 12 

Conservative and Liberal Regimes, 1858-1909 17 

THE EARLY TWENTIETH CENTURY AND 

THE SOMOZA YEARS, 1909-79 19 

United States Intervention, 1909-33 , . 19 

The Somoza Era, 1936-74 25 

The Rise of the FSLN 32 

The End of the Somoza Debayle Era 33 

The Sandinista Revolution 36 

THE SANDINISTA YEARS, 1979-90 39 

Consolidation of the Revolution, 1979-80 39 

Growth of Opposition, 1981-83 42 

Institutionalization of the Revolution, 1984 45 

The Regional Peace Effort and Retrenchment 

of the Revolution, 1986-90 46 

The UNO Electoral Victory 49 

Chapter 2. The Society and Its Environment 53 

Dennis Gilbert 

CLIMATE AND TERRAIN 55 

Natural Regions 55 

vii 



Climate 59 

DEMOGRAPHY 60 

CLASS STRUCTURE 67 

SOCIAL CONDITIONS 70 

Education 74 

Health 76 

FAMILY 78 

THE LIVES OF WOMEN 82 

RELIGION 84 

CARIBBEAN SOCIETY 89 

THE SANDINISTA REVOLUTION ON THE 

CARIBBEAN COAST 92 

Chapter 3. The Economy 97 

Barbara Annis 

HISTORICAL BACKGROUND 100 

Pre-Columbian and Colonial Era 100 

The Coffee Boom, 1840s-1940s 100 

Diversification and Growth, 1945-77 101 

Legacy of the Sandinista Revolution, 1977-79 103 

The Sandinista Era, 1979-90 104 

The Chamorro Era, 1990- 105 

NATIONALIZATION AND THE PRIVATE SECTOR 107 

Nationalization under the Sandinistas 107 

Privatization and the Private Sector 108 

The Issue of Land Ownership 110 

FINANCE 112 

Banking 112 

Currency 113 

Inflation « 114 

Tax Reform 115 

Deficits 115 

EXTERNAL SECTOR 116 

Foreign Trade and the Balance of Payments 116 

Foreign Aid 117 

External Debt . 118 

LABOR 119 

Composition of the Labor Force 119 

Employment Conditions 120 

Organized Labor 120 

Unemployment and Underemployment 122 

Wages 122 

viii 



Labor Unrest 123 

INDUSTRY 123 

AGRICULTURE 125 

Agricultural Policy 126 

Crops 127 

NATURAL RESOURCES AND CONSERVATION 131 

Fishing and Forestry 131 

Mining 131 

Conservation and the Environment 132 

SERVICES 134 

Transportation 135 

Telecommunications 136 

Electric Power and Energy 137 

PROSPECTS 139 

Chapter 4. Government and Politics 141 

Nina Serafino 

THE CHAMORRO GOVERNMENT TAKES POWER .... 144 

CONSTITUTIONAL BACKGROUND 147 

The Executive 147 

The Legislature 149 

The Judiciary 150 

Local Government 151 

Public Administration 152 

POLITICAL DYNAMICS 153 

Conflict Between the Executive and 

Legislative Branches 153 

Dispute over Property Rights 156 

POLITICAL PARTIES 159 

The National Opposition Union (UNO) 

Coalition 159 

Small Non-UNO Parties . 162 

Sandinista National Liberation Front 164 

Interest Groups 168 

The Media 180 

FOREIGN RELATIONS 182 

Relations with the United States 183 

Relations with Central American Countries 1 86 

Relations with Other Countries 188 

Chapter 5. National Security 191 

Jean R. Tartter 



ix 



MILITARY HERITAGE 194 

National Guard, 1927-79 195 

Sandinista Guerrilla Movement, 1961-79 . 197 

Sandinista People's Army, 1979-90 198 

Sandinista People's Militia 200 

Foreign Influences and Assistance 202 

THE NICARAGUAN RESISTANCE 205 

ARMED FORCES AFTER 1990 207 

Army 211 

Air Force 211 

Navy 212 

DEFENSE SPENDING 213 

INTERNAL SECURITY 215 

Police and Law Enforcement 216 

Secret Police and Intelligence 218 

Human Rights 219 

Prison Conditions 220 

Criminal Justice System 221 

Appendix A. Tables 227 

Appendix B. Central American 

Common Market 239 

Ramon J. Miro 

Bibliography 251 

Glossary 271 

Index 277 

List of Figures 

1 Administrative Divisions of Nicaragua, 1993 xxiv 

2 Nicaragua in Its Central American Setting, 1993 4 

3 Areas of Insurgency, 1985 44 

4 Topography and Drainage 58 

5 Annual Rate of Population Increase, 1955-2014 62 

6 Crude Birth and Death Rates, 1955-2014 63 

7 Population by Age and Sex, 1988 64 

8 Population, 1950-2010 65 

9 Gross Domestic Product (GDP) by Sector of 

Origin, 1992 106 

10 Economic Activity, 1993 108 

11 Transportation System, 1993 136 



x 



12 Organization of the Government, 1993 148 

13 Organization of the Armed Forces, 1993 208 

14 Military Ranks and Insignia, 1993 210 



r 



xi 



Preface 



Like its predecessor, this study is an attempt to examine 
objectively and concisely the dominant historical, social, eco- 
nomic, political, and military aspects of contemporary Nicara- 
gua. Sources of information included scholarly books, journals, 
monographs, official reports of governments and international 
organizations, and numerous periodicals. Chapter bibliogra- 
phies appear at the end of the book; brief comments on 
sources recommended for further reading appear at the end of 
each chapter. To the extent possible, place-names follow the 
system adopted by the United States Board on Geographic 
Names. Measurements are given in the metric system; a conver- 
sion table is provided to assist readers unfamiliar with metric 
measurements (see table 1, Appendix A). A glossary is also 
included. 

Although there are numerous variations, Spanish surnames 
for men and unmarried women usually consist of two parts: the 
patrilineal name followed by the matrilineal. In the instance of 
Daniel Jose Ortega Saavedra, for example, Ortega is his father's 
name; Saavedra, his mother's maiden name. In nonformal use, 
the matrilineal name is often dropped. When a woman mar- 
ries, she generally drops her matrilineal name and replaces it 
with her husband's patrilineal name preceded by a "de". Thus, 
when Cristina Chamorro Barrios married Antonio Lacayo 
Oyanguren, she became Cristina Chamorro de Lacayo. In 
informal use, a married woman's patrilineal name is dropped 
(Cristina Lacayo is the informal usage.) In the case of the patri- 
lineal Somoza, we have retained the matrilineal on occasions 
when there may be confusion about which individual is being 
discussed. A minority of individuals, William Ramirez for exam- 
ple, use only the patrilineal name in formal as well as informal 
use. The patrilineal for men and unmarried women and the 
husband's patrilineal for married women are used for indexing 
and bibliographic purposes. 

The body of the text reflects information available as of 
December 1993. Certain other portions of the text, however, 
have been updated. The Introduction discusses significant 
events that have occurred since the completion of research; the 
Country Profile includes updated information as available; sev- 
eral figures and tables are based on information in more 



xiii 



recently published sources; and the Bibliography lists 
sources thought to be particularly helpful to the reader. 



Country Profile 




Country 

Formal Name: Republic of Nicaragua. 
Short Form: Nicaragua. 
Term for Nationals: Nicaraguan(s). 
Capital: Managua. 



NOTE — The Country Profile contains updated information as available. 



xv 



Date of Independence: Only September 15, 1821, from Spain, 
observed. July 1, 1823, from Mexico and April 30, 1838, from the 
United Provinces of Central America noted but not celebrated. 

National Holiday: Independence day, September 15. 

Geography 

Size: Largest country in Central America with 129,494 square 
kilometers. Land area 120,254 square kilometers. 

Topography: Three major geographic regions. Pacific lowlands 
or western region characterized by flat terrain broken by line 
of active volcanoes between the Golfo de Fonseca and Lago de 
Nicaragua paralleling Pacific coast. East of volcanoes lies large 
structural rift forming long narrow depression from Golfo de 
Fonseca southeastward. Two largest freshwater lakes in Central 
America (Lago de Managua and Lago de Nicaragua) also 
located in rift. Caribbean lowlands (or eastern) region covers 
about half of national territory; this region consists of tropical 
rain forest and pine savannas crossed by numerous rivers 
flowing to Caribbean. Between Pacific lowlands and Caribbean 
lowlands are central highlands, most extensive in north. 
Western Nicaragua situated at juncture between colliding 
tectonic plates, resulting in high incidence of earthquakes and 
volcanic activity. 

Climate: Warm and relatively humid with some regional 
variation; temperature variation mainly function of elevation. 
Pacific lowlands generally more salubrious than Caribbean 
lowlands. East receives high average annual rainfall; west drier. 
Rainfall seasonal; May through October wettest months. 
Caribbean coast subject to destructive tropical storms and 
hurricanes from July to October. 

Society 

Population: In 1993 population estimated at 4.08 million. Rate 
of annual growth calculated at about 3.4 percent — one of 
highest in Latin America. Population density 32 persons per 
square kilometer in 1990 — lowest in Central America. Most of 
population concentrated in Pacific lowlands; Caribbean 
lowlands sparsely settled. Population 55 percent urban, with 



xvi 



urban growth nearly twice that of rural areas. 

Ethnic Groups: Although definitions imprecise, approximately 
76 percent of population mestizo, 10 percent European, about 
3 percent indigenous, estimated 11 percent Creole or African. 
Indigenous, Creole, and African populations dominate in east; 
ladinos (culturally Hispanic mestizos and Europeans) mainly 
in Pacific lowlands and central highlands. 

Languages: Spanish official language, spoken by almost 
everyone in Pacific lowlands and central highlands. English 
predominant language in Caribbean lowlands. Miskito 
predominant indigenous language, also spoken in east. Spanish 
widely used as second language in east. 

Education and Literacy: Education system underfunded and 
generally inadequate. Access to education improved during 
1980s, with introduction of free education, but large majority of 
population was not completing primary schooling in 1993. 
Literacy reported at about 50 percent at end of Somoza regime. 
Literacy campaign in 1980 reportedly raised functional literacy 
rate to about 77 percent. 

Health and Welfare: Health indicators generally poor; life 
expectancy at birth 62 years in 1991; infant mortality rate 72 per 
1,000 live births in 1989; high incidence of malnutrition; high 
incidence of infectious diseases, mainly enteritis, malaria, and 
tuberculosis; relatively low incidence of human immuno- 
deficiency virus (HIV). Health care system inadequate despite 
modest improvement during 1980s. Welfare indicators generally 
poor; approximately 70 percent of population below poverty 
line; nearly 50 percent unemployed or underemployed; access to 
safe drinking water and basic public services generally poor, 
especially in rural areas and Caribbean coast; quality of housing 
poor in urban shantytowns, with acute housing shortage in 
capital. 

Economy 

Salient Features: Formerly mixed economy undergoing 
extensive market-oriented structural adjustment, mainly by 
means of privatization of state enterprises and downsizing of 
public sector. Restoration of economic stability and 
reconstruction after eight years of civil war major concerns. 
Production dominated by primary commodities, mainly 
agricultural, for export and domestic consumption. Small 



xvii 



manufacturing sector produces mainly for domestic and 
regional markets. Debt and political instability hampering 
growth and preventing return of foreign capital in early 1990s, 
despite dramatic progress in reducing inflation since 1990. 
Economy heavily dependent on foreign aid. 

Gross Domestic Product (GDP): US$1.6 billion in 1992 
(US$425 per capita), one of lowest per capita figures in 
Western Hemisphere. Economy contracted sharply during late 
1980s and stagnant since 1990, with real GDP growth at minus 
0.5 percent in 1992. Slow recovery expected by mid-1990s. 

Agriculture: Mainstay of economy, accounted for approximately 
29 percent of GDP in 1989 and an estimated 24 percent in 1991; 
employs about 45 percent of work force. Production heavily 
oriented toward export of coffee and cotton, which generate 
about half of total export revenues; bananas, sugar, tobacco, 
sesame, rice, and beef also important export commodities. 
Domestic-use agriculture robust, but increasingly supplemented 
by food and basic grains imports. Approximately 80 percent of 
agricultural production controlled by private sector, following 
expropriation and redistribution of large landholdings during 
1980s. 

Industry: Small industrial sector producing for domestic and 
regional markets; experienced substantial growth during 1960s 
in response to tariff protection and intraregional trade 
expansion under Central American Common Market (CACM) 
but declined precipitously thereafter. Industrial production as 
share of GDP peaked at 23 percent in 1978, dropping to 19 
percent by 1989. Agro-industries dominate, accounting for 75 
percent of total industrial output; other domestic use 
industries include cement production, chemicals processing, 
metals processing, and petroleum refining. Industrial recovery 
impeded during early 1990s by outdated and inefficient 
equipment and production methods, fuel shortages, lack of 
spare parts, labor unrest, and lack of supporting infrastructure. 

Minerals: Mining not significant economic activity; accounted 
for 0.6 percent of GDP in 1990. Gold, silver, and salt mining 
main sources of mineral income; known deposits of copper, 
lead, iron, antimony, tungsten, molybdenum, and phosphate 
remain unexploited. Mining sector, nationalized in 1979, 
remained under state control in 1993. Offshore oil and natural 



xviii 



gas exploration being undertaken off Pacific and Caribbean 
coastlines. 

Energy: Domestic energy needs met by petroleum imports, as 
well as by hydroelectric and geothermal electricity generation. 
Imported oil, mainly from Mexico and Venezuela, satisfies 
approximately half of domestic demand. One geothermal and 
one hydroelectric plant in operation; a second, 400-megawatt 
hydroelectric plant under construction. Electrification uneven, 
heavily concentrated in urban areas. National power grid 
damaged by civil war. 

Foreign Trade: Exports valued at US$343 million in 1991, 
dominated by coffee, cotton, bananas, sugar, and beef. Imports 
valued at US$650 million in 1991, mainly petroleum and its 
byproducts, other raw materials, nondurable consumer goods, 
and machinery. Soviet Union, Eastern Europe, Cuba, the 
European Community (EC), now the European Union (EU), 
and Latin America major trading partners during 1980s. Trade 
conducted mainly with EC, United States, Latin America, and 
Japan since 1990. Balance of trade characterized by sizable 
deficits since 1980. 

Balance of Payments: Total debt estimated at US$10.6 billion 
in 1990. Experienced highest per capita debt in Latin America 
because of chronic fiscal and current account deficits during 
1980s, resulting in approximately US$4 billion owed to former 
Soviet Union and approximately US$6 billion owed to Western 
nations and multilateral lending institutions. Granted 
substantial debt relief beginning in 1990. 

Foreign Aid: Most economic assistance provided by United 
States, EC, and multilateral agencies since 1990. Major 
recipient of aid from socialist countries during 1980s. 

Currency and Exchange Rate: Gold cordoba (cordoba oro — 
C$o); US$1 = C$o6.55 in April 1994. 

Fiscal Year: Calendar year. 

Transportation And Telecommunications 

Roads: 26,000 kilometers in 1993; 4,000 kilometers paved, 
2,200 kilometers gravel. Pan American Highway runs north to 
south for 369 kilometers. Roads highly concentrated in western 



xix 



and central zones, with no paved roads linking Caribbean and 
Pacific coasts. 

Railroads: 373 kilometers, 1.067-meter narrow gauge, linking 
Managua to Leon and Granada. Section from Leon to Corinto 
unusable. 

Ports: One principal, suitable for deep-water berthing at 
Corinto; secondary port at Puerto Sandino for offloading of 
petroleum; two smaller ports at Puerto Cabezas and Bluefields. 

Airports: One international, Augusto C. Sandino International 
Airport in Managua; ten secondary airfields. 

Telecommunications: Eight television, eleven FM, and forty-five 
AM radio stations. Total number of telephones in 1993 
estimated at 60,000, or 1.5 per 100 inhabitants. International 
communications to other Central American countries via 
Central American Microwave System (CAMS), to rest of world 
via International Telecommunications Satellite Corporation 
(Intelsat) satellite ground station near Managua and via former 
Soviet Union Intersputnik system. 

Government And Politics 

Government: Under constitution promulgated January 1, 
1987, republic with three independent branches. Executive 
elected for six-year term (Violeta Barrios de Chamorro became 
president on April 25, 1990). Unicameral National Assembly 
elected to six-year term concurrent with that of president. 

Politics: Numerous political parties, most based on personalities 
rather than political philosophies. Largest and most cohesive 
single party, leftist Sandinista National Liberation Front 
(FSLN) headed by Daniel Jose Ortega Saavedra, entered into 
opposition in 1990 after almost eleven years in government. 
Since 1990, government ostensibly held by National Opposition 
Union (UNO), loose coalition of fourteen parties united to 
oppose FSLN. Relations between government of President 
Chamorro and UNO leadership strained over government 
support for laws guaranteeing transfer of expropriated 
properties to Sandinistas and continued FSLN influence within 
police and armed forces. Political process marked by violent 
labor militancy and sporadic political violence by rearmed 



xx 



Contra and Sandinista guerrillas. Presidential and National 
Assembly elections scheduled for 1996. 

Judicial System: Judicial system consists of Supreme Court, 
which handles both civil and criminal cases, courts of appeal, 
and courts of first instance at departmental and municipal 
levels. 

Administrative Divisions: Nine regions, subdivided into 
seventeen departments (fifteen full departments and two 
autonomous regions in Caribbean lowlands). In accordance 
with 1988 Law on Municipalities, 143 municipal units 
functioning in 1992. 

Foreign Relations: Since 1990 Chamorro government has 
greatly improved relations with United States and supported 
Central American integration. During 1980s FSLN government 
aligned itself with former Soviet bloc and supported leftist 
causes, straining relations with United States and neighboring 
Central American countries. 

International Agreements and Memberships: Membership in 
Organization of American States (OAS), Central American 
Common Market, System of Central American Integration 
(Sistema de Integration Centroamericana — SICA), and United 
Nations (UN) and its specialized agencies. Important treaties 
include: 1947 Rio de Janeiro Treaty of Mutual Assistance (Rio 
Treaty), Treaty for the Proscription of Nuclear Weapons in 
Latin America (Tlatelolco Treaty), and Central American 
Peace Agreement (Esquipulas II). 

National Security 

Armed Forces: In 1993 consisted of Sandinista People's Army 
(EPS), with ground, air, and small naval elements. Reduced to 
15,200 personnel from peak strength of 97,000 during 1980s. 
Mandatory military service and reserve and militia forces 
eliminated in 1990. EPS nominally subordinate to civilian 
authority but in practice enjoys substantial autonomy within 
political system; maintains strong links to FSLN. 

Major military Units: 13,500-member army with ground forces 
organized into six regional commands; 500-member naval 
element with sixteen patrol boats; and 1,200-member air 
element organized into one squadron. 

Military Equipment: Most weaponry supplied by former Soviet 



xxi 



Union, with some older items purchased from United States 
prior to 1979. Some naval craft acquired from People's 
Democratic Republic of Korea (North Korea). 

Defense Budget: Estimated at US$210 million in 1993, about 
14 percent of GDP. 

Internal Security Forces: 11,000-member National Police, 
formerly Sandinista Police, under Ministry of Government. 



XXll 



HONDURAS 




\ mOcotal 
\ .^Somo'to^j 

4 



^ r 

3 



/ 



Fv 4 v. 



/A 

Jinotega 



-12 (Pacific 
Ocean 




Chinandega* ' Le6n 



Matagalpa W.-/ 
Boaco 



igua/^tj panada 1 2 



International boundary 

Department or 

region boundary 
® National capital 
• Department or 
region capital 

25 50 Kilometers 



Managua/ 

•i'io 

Jinotepe \ 
13 





COSTA RICA 

Boundary representation ^ 
n<rt necessarily authoritative j 



1 Madriz 

2 Nueva Segovia 

3 Jinotega 



4 Est el i 

5 Chinandega 

6 Leon 



7 Matagalpa 

8 Managua 

9 Masaya 



10 Granada 

11 Boaco 

12 Chontales 



13 Carazo 

14 Rivas 

15 Rio San Juan 



Figure 1. Administrative Divisions of Nicaragua, 1993 



xxiv 



Introduction 



NICARAGUA IS A COUNTRY OVERWHELMED by its history. 
Since colonial times, Nicaragua has suffered from political 
instability, civil war, poverty, foreign intervention, and natural 
disasters. Successive governments have been unable to bring 
political stability or significant economic growth to the country. 
Personal and foreign special interests have generally prevailed 
over national interests, and repeated foreign intervention in 
Nicaraguan political and economic affairs has resulted in 
nationalistic reactions and a legacy of suspicion of foreign gov- 
ernments and their motives. 

From precolonial times through the present, the broad cen- 
tral mountain range that splits the country in two has also 
divided it into two culturally distinct areas. Before the arrival of 
the Spanish, western Nicaragua was populated by indigenous 
peoples related to the Maya and Aztec in the north; eastern 
Nicaragua's earliest inhabitants were believed to have migrated 
to the region from South America. The fertile volcanic soils 
and more salubrious climate in the west attracted Spanish set- 
tlers throughout the colonial period. As a result, most of Nica- 
ragua's present-day population lives in the western part of the 
country. The eastern Caribbean coastal area with its sultry cli- 
mate and nonfertile soils attracted only a handful of English 
settlers and pirates and some blacks (many of whom were run- 
away slaves) from the West Indies. 

Europeans first saw what is now Nicaragua when Christo- 
pher Columbus sailed south along the Caribbean coast on his 
fourth voyage to the Americas in late 1502 and claimed the 
entire area for Spain. Several land expeditions were launched 
in the 1520s to subdue the indigenous population, but in gen- 
eral the Spanish were more interested in exploiting the vast 
riches of Mexico and Peru than in settling Central America 
(see Glossary). The population of the area dropped precipi- 
tously in the sixteenth century. Incoming Spanish settlers were 
few, and the indigenous population was all but wiped out by 
exposure to new diseases, with the remainder forcibly sent to 
Peru to work the silver mines. Administratively during this 
period, the region became a backwater province of the Audien- 
cia of Guatemala. 



xxv 



The seventeenth century proved no more auspicious than 
the previous century. Although the population of Nicaragua 
grew somewhat because of the introduction of livestock, the 
province's economy was devastated by trade restrictions 
imposed by Spain, by natural disasters, and by foreign attacks. 
The local government neglected agricultural production, pre- 
ferring to import food. The economy of Nicaragua also suf- 
fered because of the massive destruction caused by three 
powerful earthquakes during the period. During the second 
half of the century, Nicaragua was subjected to bloody incur- 
sions from English, French, and Dutch pirates. In 1668 and 
1670, these buccaneers captured and destroyed the city of 
Granada, center of the province's agricultural wealth. Control 
of the eastern half of the country eluded the Spanish, and the 
English declared eastern Nicaragua to be a protectorate of the 
English crown. 

The eighteenth century saw the beginnings of economic 
growth based on agriculture but also the birth of a pernicious 
political rivalry that was to plague the country for two centu- 
ries. By the 1750s, a powerful elite was well established in the 
cities of Leon and Granada. The landowners in Leon concen- 
trated on cattle raising and the export of animal products, and 
Granada became the center of regional agricultural trade. 
Although these local elites agreed on promoting Nicaragua as 
the site for a transisthmian canal linking the Caribbean Sea 
and Pacific Ocean, they differed violently on the trade policies 
of the province (free-trade or protectionist) . During the colo- 
nial period, these two cities fought for political control over the 
province. After independence, the rivalry only intensified, 
often breaking into open warfare. The hatred between the two 
factions, the liberals, or free-traders, in Leon and the conserva- 
tives, or protectionists, in Granada, became so institutionalized 
that the factions often forgot the original philosophical differ- 
ence that had spawned their rivalry. The violent conflict 
between liberals and conservatives was one of the most impor- 
tant and destructive aspects of Nicaraguan history, an aspect 
that would last until well into the twentieth century. Politicians 
frequently chose party loyalty over national interest, and the 
nation was often the loser in interparty strife. 

Establishment of an independent Nicaragua came in several 
stages. The first step occurred when the Audiencia of Guate- 
mala declared its independence from Spain in 1821 and 
became part of the Mexican Empire. Separatist feelings 



xxvi 



throughout the isthmus grew, and the United Provinces of Cen- 
tral America declared their independence from Mexico in 
1823. Under a weak federal government, each province of the 
new nation created its own independent internal administra- 
tion. Efforts to centralize power led to civil war between 1826 
and 1829. The federation finally dissolved in 1837, and Nicara- 
gua's independence was formally declared on April 30, 1838. 

The mid-1 800s were marked by unstable national govern- 
ments and a rivalry between the United States and Britain to 
bring Nicaragua under their spheres of influence. The goal of 
both foreign powers was control of a transisthmian transit 
route, either overland or via a new Caribbean-to-Pacific canal. 
Continued domestic turmoil in the 1850s provided the oppor- 
tunity for William Walker, a soldier of fortune from the United 
States, to take over Nicaragua. The struggle to expel Walker 
was long and costly, ultimately involving intervention from all 
of Nicaragua's neighbors, the British Navy, and an invasion by 
the United States marines. The Walker affair left a bitter legacy 
in Nicaragua and was the first example of what was to become a 
common occurrence in the country: a penchant for Nicara- 
guan politicians to call on the United States to settle domestic 
disputes and an eagerness by the United States to respond by 
military intervention. 

Nicaragua's thirty-five-year period of relative calm under 
conservative administrations was broken in 1893 by liberal Jose 
Santos Zelaya. Zelaya's rule proved to be one of the most con- 
troversial periods in Nicaraguan history. Zelaya, a ruthless dic- 
tator who managed to stay in power for sixteen years despite 
strong foreign and domestic opposition, was responsible for 
the creation of a professional army and the growth of strong 
nationalist feelings. Zelaya opened the country to foreign 
investment, expanded coffee production, and boosted banana 
exports. His government promoted internal development and 
modernized Nicaragua's infrastructure. During his tenure, new 
roads and seaport facilities were constructed, railroad lines 
were extended, and many government buildings and schools 
were built. Opposition from conservatives eventually erupted 
into a revolt that, with the support of United States marines, 
drove Zelaya from power in 1909. 

Zelaya's fall ushered in another era of political instability 
and foreign intervention. The United States, flush with its new 
colonies in the Caribbean won after the Spanish-American War 
(1898), entered a new era of interventionism in the Caribbean 



xxvii 



and Central America. The United States marines who helped 
topple Zelaya remained in Nicaragua to support subsequent 
conservative governments. United States banks lent money to 
Nicaragua on the condition that these banks would retain com- 
plete control of Nicaraguan customs and all revenue from the 
railroads and steamships. By the end of World War I, United 
States military presence and supervision of the economy had 
turned Nicaragua into a near United States protectorate. 

As isolationist sentiment grew in the United States in the 
1920s, there were increased calls in the United States for 
removal of the marines from Nicaragua. United States officials 
decided that an honorable way to withdraw forces was to create 
a national Nicaraguan constabulary, the National Guard, to 
maintain order after the marines withdrew. The National 
Guard was formed in June 1925, and the last United States 
marines withdrew in August. 

The worst predictions regarding Nicaragua's future after the 
departure of United States marines soon came to pass. The 
Nicaraguan government dissolved into chaos, and liberal-con- 
servative fighting erupted anew. The United States, fearing a 
full-scale civil war would result in a leftist victory, as had been 
the case after the Mexican Revolution (1911-17), sent the 
marines back to Managua in January 1927. This time, however, 
the rapid buildup of United States forces led only to increased 
mayhem. The fighting did not stop until massive United States 
power and the growing strength of the National Guard forced 
most combatants to sign a truce. Out of this latest struggle 
would emerge two of the most influential Nicaraguans of the 
twentieth century, Augusto Cesar Sandino and Anastasio 
Somoza Garcia. 

Sandino was the only major player who refused to abide by 
the truce. Initially a combatant for the liberals in the fighting, 
he turned his forces against the United States marines and the 
National Guard, which he considered merely a tool of the 
United States, after the implementation of the peace accord. 
Sandino led a force of several hundred who engaged in classic 
guerrilla warfare in remote rural areas. Never a serious threat 
to the national government, Sandino's forces nevertheless 
proved a drain on the economy and a constant gadfly and 
embarrassment to the National Guard. Sandino's hit-and-run 
tactics were also the excuse that allowed 2,000 United States 
marines to remain in Nicaragua. 



xxviii 



Once again, domestic events in the United States had pow- 
erful repercussions in Nicaragua. The deepening Great 
Depression, outrage in the United States over the growing 
number of names on marine casualty lists, and a desire to 
improve relations with Latin America in the face of a growing 
threat from Japan and Germany resulted in president Herbert 
Hoover's withdrawing all marines from Nicaragua in the wan- 
ing days of his administration in January 1933. 

The National Guard and its new director, Somoza Garcia, 
immediately moved to fill the power vacuum left by the depar- 
ture of the United States. Recognizing the potential power of a 
strong army in a weak nation, Somoza Garcia rapidly began 
consolidating power within the National Guard and soon was 
acting independently of his uncle, President Juan Bautista 
Sacasa, who was nominal head of the guard. In January 1934, 
upon leaving the president's house where he had been con- 
ducting peace negotiations, Sandino was assassinated by 
National Guard associates, who had acted without approval of 
the president. As Somoza Garcia's power over the National 
Guard strengthened, his control of national affairs became 
more evident. Finally, in June 1936, Somoza Garcia forced his 
uncle to resign as president and instructed the Nicaraguan 
Congress name him as his uncle's replacement. A Somoza 
dynasty that would last for more than four decades was hence 
founded. 

For the next twenty years, Somoza Garcia was dictator of 
Nicaragua, always in control of the National Guard and ruling 
either directly as president or indirectly through a hand-picked 
and compliant family associate who held the post of president. 
A weak opposition was tolerated but only to give a democratic 
facade to the regime. Real opposition was met with incarcera- 
tion, torture, exile, or assassination. A clever politician, Somoza 
Garcia maintained power by changing roles to gain the support 
of one or another influential group in Nicaragua, while keep- 
ing the support of the United States. He, for example, 
expressed sympathy with fascism in the late 1930s in order to 
win support from the business sector and the upper classes. 
However, he was an ardent supporter of the Allies in World War 
II and was rewarded with large amounts of United States mili- 
tary aid. In the late 1940s and early 1950s, domestically he sup- 
ported labor (generally on the left politically), while keeping a 
fervent anticommunist stance in international forums. 



xxix 



Control over the country also meant almost complete con- 
trol over its economy. The 1940s and 1950s were boom times 
for the Nicaraguan economy as coffee prices soared, but most 
of the country's profit went into the pockets of Somoza Garcia 
and his cronies. (Somoza Garcia is reported to have quipped, 
"Bucks for my friends, bullets for my enemies.") They bought 
or expropriated farms, mining interests, and companies until 
by the late 1940s, Somoza Garcia was the nation's largest land- 
owner. He owned most of the country's cattle ranches and cof- 
fee plantations and, as well, owned or controlled all banks, the 
national railroad, the national airlines, a cement factory, textile 
plants, several large electric power companies, and extensive 
rental property in the cities. Somoza Garcia's policies made 
him many enemies, including a disgruntled citizen who assassi- 
nated him in September 1956. 

Somoza Garcia had changed the presidential succession so 
that it devolved on the director of the National Guard, a post 
held by his older son, Luis Somoza Debayle. Luis Somoza 
Debayle immediately assumed the post of president, and his 
younger brother, Anastasio Somoza Debayle, took over as direc- 
tor of the National Guard. The brothers' different personalities 
soon became apparent. Although both had been trained to 
take over as president in turn, the older Somoza brother 
appeared to favor a slight liberalization of his father's repres- 
sive style of governing. The younger brother, in contrast, 
lacked his father's political skills and increasingly commanded 
the National Guard through brute force. Because of the older 
brother's poor health, Anastasio Somoza Debayle assumed 
more and more power. 

The formal transfer of power came in 1967, shortly before 
Luis Somoza Debayle suffered a fatal heart attack. Decades of 
pent-up grievances against corruption and repression had cre- 
ated opposition to the Somozas. Having none of his father's 
ability to finesse the opposition, however, the new president, 
Anastasio Somoza Debayle, reacted to any criticism by increas- 
ing political repression. Instead of being trumped as in the 
past, opposition forces now seemed only to be strengthened by 
Anastasio Somoza Debayle's repressive tactics. For the next 
dozen years, a cycle of active opposition to Anastasio Somoza 
Debayle's regime and the regime's ever more ruthless response 
threatened to destroy Nicaragua's economy and society. 

As the 1970s progressed, all sectors of Nicaraguan society 
joined the opposition to Anastasio Somoza Debayle's regime. 



xxx 



The turning point for many was the December 1972 earth- 
quake that destroyed Managua. National Guard members 
joined in looting the city after the tremor, and it was later 
revealed that most of the international aid after the earthquake 
enriched the Somoza family instead of reaching the victims. As 
a result, almost all political figures drifted over to the opposi- 
tion. The president was nominally identified with the liberals 
and therefore was opposed by the conservatives from the 
beginning of his rise to power. Anastasio Somoza Debayle's loy- 
alty to family, cronies, and the National Guard over party, how- 
ever, gradually alienated former fellow liberals. The country's 
rapid economic decline after the earthquake lost him the sup- 
port of labor, the middle class, and Nicaragua's elite. The left 
and student groups had long been vocal opponents of the 
regime. The Roman Catholic Church and elements of the 
press, especially the influential La Prensa, also became outspo- 
ken in their condemnation of the government's repressive 
actions. 

The group that was eventually to take the lead in opposing 
Anastasio Somoza Debayle, the Sandinista National Liberation 
Front (Frente Sandinista de Liberacion Nacional — FSLN), was 
formed in 1962. Taking its name and much of its ideology from 
Sandino, the FSLN grew from a group of university students to 
a small Marxist revolutionary organization operating in rural 
areas. Fueled by growing disenchantment with the dictator and 
foreign help, the FSLN was militarily challenging the National 
Guard throughout the country by the late 1970s. Despite the 
collapse of the economy and the loss of all domestic and inter- 
national support, the tenacity of Anastasio Somoza Debayle 
and the National Guard made it increasingly apparent that a 
change in Nicaragua would come through revolution instead 
of peaceful reform. 

After two years of violent struggle, Anastasio Somoza 
Debayle finally fled Nicaragua, and on July 20, 1979, the FSLN 
and other members of the revolutionary force entered Mana- 
gua. A five-member junta assumed power, pledging political 
pluralism, a mixed economic system, and a nonaligned foreign 
policy. The new government inherited a country in ruins; an 
estimated 50,000 Nicaraguans were dead, 120,000 exiled, and 
600,000 homeless. Despite the destruction, most Nicaraguans 
supported the new regime because they saw the Sandinista (see 
Glossary) victory as an opportunity to end the repression and 



xxxi 



economic inequalities of the almost universally hated Somoza 
regime. 

As leaders in the military struggle and the best-organized 
and most powerful group in postrevolutionary Nicaragua, the 
Sandinistas rapidly began consolidating their political power. 
The constitution was abrogated, and the Congress was replaced 
by an appointed Council of State, dominated by Sandinista 
members. The two influential non-Sandinista members of the 
ruling junta resigned, and by 1983 it was clear that Daniel Jose 
Ortega Saavedra, a long-time member of the FSLN, controlled 
the junta. The National Guard was abolished and replaced by 
the new Sandinista People's Army (Ejercito Popular Sandi- 
nista — EPS), headed by Humberto Ortega Saavedra. Mass pop- 
ular groups were formed to represent labor, peasants, and 
women. 

Domestic and international support for the new Sandinista 
government was not universal, however. The ethnic minorities 
from the Caribbean coast, neglected by national governments 
since colonial times, rejected Sandinista efforts to incorporate 
them into the national mainstream and demanded autonomy. 
Worried that Nicaragua would become "another Cuba," the 
United States government launched a campaign to isolate the 
Sandinista government in 1981. Later that year, the Reagan 
administration (1981-89) authorized support for groups trying 
to overthrow the Sandinistas. Using camps in southern Hondu- 
ras as a staging area, the United States supported groups of dis- 
gruntled former members of the National Guard. This effort 
became known as the Nicaraguan Resistance; members of the 
group were later called the Contras (short for contrarevoluciona- 
rios — see Glossary) . 

As the Contra war intensified, the Sandinistas' tolerance of 
political pluralism waned, and the government imposed emer- 
gency laws to ban criticism and organization of political opposi- 
tion. Social programs also suffered as a result of the war 
because the Sandinista regime was forced to increase military 
spending until half of its budget went for defense. Agricultural 
production also sharply declined as refugees fled areas of con- 
flict. 

Throughout the 1980s, as the war expanded, the economy 
continued to deteriorate, in part because of a devastating 
embargo on Nicaraguan goods imposed by the United States in 
early 1985. In 1987, in the aftermath of the Iran-Contra affair, 
the United States Congress, however, stopped all military sup- 



xxxii 



port to the Contras. The result of the cutoff was a military stale- 
mate; the Contras were unable to keep on fighting without 
United States support, and the Sandinista government could 
not afford to continue waging an unpopular war that had 
already devastated the economy. The Contras and the Sandinis- 
tas had few options other than to negotiate. 

International negotiations among the Central American 
countries in the late 1980s laid the groundwork for a peace set- 
tlement. Elections, originally scheduled for the fall of 1990, 
were moved to February 1991. President Ortega also agreed to 
guarantee fair participation for opposition parties and to allow 
international observers to monitor the entire electoral process. 

The Sandinistas felt confident of their success at the polls 
despite deteriorating socioeconomic conditions. On June 6, 

1989, fourteen parties, united only in their opposition to the 
Sandinistas, formed a coalition called the National Opposition 
Union (Union Nacional Opositora — UNO), whose support was 
drawn from a broad base, including conservative and liberal 
parties. Despite its determination to vote the Sandinistas out of 
power, however, the UNO coalition remained a weak opposi- 
tion lacking a cohesive program. 

Despite some violent incidents, the electoral campaign took 
place in relative peace. In an effort to divert attention from the 
critical economic situation, the Sandinista campaign appealed 
to nationalism, depicting UNO followers as pro-Somoza, instru- 
ments of United States foreign policy, and enemies of the Nica- 
raguan revolution. The UNO coalition under Violeta Barrios 
de Chamorro directed a campaign centered around the failing 
economy and promises of peace. Many Nicaraguans expected 
the country's economic crisis to deepen and the Contra con- 
flict to continue if the Sandinistas remained in power. Chamo- 
rro promised to end the unpopular military draft, bring about 
democratic reconciliation, and promote economic growth. 
The UNO coalition won a surprising victory on February 25, 

1990. Exhausted by war and poverty, the Nicaraguan people 
opted for change. 

The new administration inherited a country in ruins. Agri- 
culture remained the country's primary economic resource, 
but production of the two main crops, coffee and cotton, had 
dropped during the 1980s. Manufacturing, always a small part 
of the economy, had practically ceased by 1990. The transporta- 
tion and telecommunications networks, found almost exclu- 
sively in the western half of the country and inadequate even 



xxxiii 



during the Somoza era, were damaged by nearly two decades of 
righting. Blackouts were frequent because the electric power 
system was often the target of sabotage during the Contra war 
and because the country frequently was unable to pay for 
petroleum, all of which was imported, to generate electricity. 
The entire banking system was bankrupt, and more than half 
the labor force was unemployed or underemployed. A per cap- 
ita gross domestic product (GDP — see Glossary) of less than 
US$500 gave Nicaragua the dubious distinction of being one of 
the poorest nations in the Western Hemisphere. Perhaps the 
only bright spot in the economic morass was that the collapse 
of the economy stopped the ecological destruction of the rich 
forest lands in eastern Nicaragua. 

Social conditions largely paralleled the poor state of the 
economy. Although in their early years in power, the Sandinis- 
tas put effort into improving the health and education systems 
and the literacy rate, diversion of half of the national budget to 
the military during the second half of their administration 
largely wiped out the significant gains made in their first few 
years. Even using spartan standards for what is adequate for 
survival, official government statistics in 1992 classified two- 
thirds of Nicaraguans as poor. Only slightly more than half of 
primary-school age children attended school. Most rural 
inhabitants (45 percent of the population) and many urban 
dwellers (55 percent out of a total of nearly 4 million people) 
lacked access to health care. 

The ethnic divide adds to the country's social problems. 
Nicaragua continues to be ethnically divided in two: the west is 
relatively homogeneous, Spanish-speaking, culturally Hispanic, 
and racially mestizo; the east is a multiracial, multicultural, and 
mostly English-speaking region. Although the people are nom- 
inally Roman Catholic, various Protestant denominations have 
made significant inroads in recent years, particularly in the 
east. 

In addition to its overwhelming economic and social chal- 
lenges, the new Chamorro administration faced immediate 
political problems. Almost from the day it took power, the Cha- 
morro government was a stepchild. Even though Chamorro 
personified the Nicaraguan people's aspiration for peace, nei- 
ther the UNO nor the FSLN recognized the government as the 
legitimate representative of its political, social, and economic 
aspirations for Nicaragua. The strong constitutional powers of 
the executive branch theoretically should have given the presi- 



xxxiv 



dent adequate control over the political and economic systems, 
but the transition agreements left the Sandinistas in control of 
the military and police. 

President Chamorro's first four years in power were marked 
by social, political, and economic instability. The economy con- 
tinued deteriorating. Although the demobilization of the Con- 
tras concluded in June 1990, violence continued in rural areas, 
especially in the country's northern departments. Rearmed 
members of the Nicaraguan Resistance, now known as Recon- 
tras, argued that the Chamorro government did not comply 
with commitments made during the demobilization process. In 
the spring of 1991, an estimated 2,000 Recontras rearmed and 
resumed guerrilla operations in the northern part of the coun- 
try. They charged the Chamorro government with not fulfilling 
its promises of land and economic assistance to the Contras as 
they disarmed and demobilized. The reorganization of the 
police and the army, as well as the removal of Humberto 
Ortega as army chief, was necessary, according to the Recon- 
tras, for their disbandment. 

After the Recontras staged uprisings in support of their 
demands, demobilized Sandinista soldiers, calling themselves 
Recompas, took up arms during late August 1991 to fight 
against anti-Sandinista forces and protect the accomplishments 
of the Sandinista revolution, which they perceived as being 
threatened by the UNO government. Recompas clashed with 
Recontras and government forces and demanded compliance 
with the commitments made to them during the peace process. 
Government and army intervention persuaded the two groups 
to halt the fighting. Ironically, the Recontras and Recompas 
discovered that they had common grievances and joined forces 
in a new group called the Revueltos. To achieve political concil- 
iation, the government launched a plan for reconciliation. The 
government initiative failed, however, to disarm the civilian 
population. In the spring of 1992, the Revueltos had an esti- 
mated 2,000-member force operating in northern Nicaragua. 

At the end of 1992, continued confrontation between the 
Chamorro government and the UNO coalition also threatened 
the country's democratic institutions. A conflict over politics 
developed among UNO representatives in the National Assem- 
bly. The UNO group in the assembly split into two groups: a 
larger conservative wing, headed by Alfredo Cesar Aguirre, 
that demanded a complete rupture with the Sandinistas and 
began to oppose the president; and a smaller, more moderate 



xxxv 



group, headed by Antonio Lacayo Oyanguren, that insisted on 
cooperation with the FSLN as a prerequisite for national recon- 
ciliation and continued to support the president's policies. The 
group headed by Cesar was backed by conservatives in the 
United States Senate, who threatened to freeze United States 
aid to Nicaragua in an effort to persuade the Chamorro admin- 
istration to oppose the Sandinistas more strongly. 

The political crisis grew during the summer of 1992, when 
Cesar launched a political offensive against Lacayo in an effort 
to implicate Lacayo in fraud and embezzlement of government 
funds. Cesar also directed attacks on Humberto Ortega and 
high-ranking police officials. Conflict in the National Assembly 
heightened when eight UNO deputies broke ranks and began 
voting with the Sandinistas. This new UNO/Sandinista bloc 
represented a majority within the legislature, and Cesar, 
backed by most of the remaining UNO coalition, took over the 
National Assembly in what many considered a political coup. 
The Sandinista faction boycotted Cesar's actions by walking out 
of the National Assembly. 

The UNO bloc in the National Assembly headed by Cesar 
demanded Humberto Ortega's removal from the army and 
Chamorro's ouster from the presidency. It also demanded 
property legislation to abolish the Pinata — the FSLN legislation 
giving the Sandinistas titles to considerable state property put 
into effect immediately following the 1990 elections. At the 
same time, the United States Congress froze US$116 million in 
economic aid to Nicaragua pending restructuring of the 
police. In an effort to unfreeze the United States economic 
package, the Chamorro administration negotiated the removal 
of top Sandinista police leaders, including its chief, Rene Vivas 
Lugo. The Nicaraguan president appealed to the courts, which 
in turn ruled that all legislation passed by the Cesar faction of 
the UNO was unconstitutional. On December 29, 1992, Presi- 
dent Chamorro used her executive powers to authorize a mili- 
tary takeover of the congressional building and the removal of 
Cesar as president of the National Assembly. The following day, 
police occupied the National Assembly building and seized all 
of its assets and documents. The government appointed a pro- 
visional administration to run legislative affairs until new 
authorities were elected on January 9, 1993. 

The takeover of the assembly, which Cesar called a coup, 
marked the end of UNO support for President Chamorro. Ten 
of the fourteen political parties that in 1990 formed the UNO 



xxx vi 



coalition now openly opposed the Chamorro administration, 
accusing it of "co-governing" with the Sandinistas. The support- 
ers of Chamorro from the old UNO coalition formed a progov- 
ernment center bloc called the Center Group (Grupo de 
Centro — GC). The FSLN delegation, along with deputies from 
the GC, elected Gustavo Tablada Zelaya, from the former Com- 
munist Party, as president of the National Assembly. The vice 
presidency of the legislature went to a Sandinista, Reinaldo 
Antonio Tefel. 

After four years of government under Violeta Barrios de 
Chamorro, Nicaragua faces difficult times on its road to eco- 
nomic recovery and national reconstruction. Its government 
must cope with insufficient economic aid to carry out eco- 
nomic reforms, lagging growth in investments, intense partisan 
struggle, and an increasingly frustrated populace. The internal 
political situation is exacerbated by the need for compromise 
with the Sandinistas, who themselves suffered a crisis of identity 
and credibility after their loss in the 1990 elections. 

The role of the armed forces remains the center of debate 
among political forces. Criticized by its neighbors and by the 
United States because it was deemed too large to be a purely 
defensive force, the army has gone through a major reduction 
in force, going from 97,000 troops in 1989 to 15,200 in 1993. 
However, despite repeated promises by the president that the 
army chief would be replaced and control be transferred from 
the Sandinistas to the national government, Humberto Ortega 
still commanded the Nicaraguan army in mid-1994. 

In mid-1994, Nicaragua is still far from enjoying the social 
and political peace necessary to attract foreign investment and 
achieve economic growth. The Chamorro administration, as 
well as the Sandinista leadership and the UNO coalition, are 
caught between their respective ideals and the need for a prag- 
matic political reconciliation. Dissatisfaction with the demo- 
cratic process prevails. Despite its internal conflicts, however, 
the FSLN remains the strongest and best organized political 
force in Nicaragua and is the only party with the organizational 
and political experience to carry out a government program. 
As the country prepares for the 1996 elections, conditions simi- 
lar to those faced in 1990 — social instability, political polariza- 
tion, and economic uncertainty — leave Nicaragua with few 
means for overcoming its political and socioeconomic crisis. 

June 28, 1994 Tim L. Merrill 



xxxvii 



Chapter 1. Historical Setting 




Augusto Cesar Sandino, guerrilla leader in the struggle against the United 
States occupation of Nicaragua in the 1 920s-l 930s 



THROUGHOUT ITS HISTORY, Nicaragua has suffered from 
political instability, civil war, poverty, foreign intervention, and 
natural disasters. Governments since colonial times have been 
unable to bring stability and sustainable economic growth. Per- 
sonal and foreign special interests have generally prevailed 
over the national interest, and foreign intervention in Nicara- 
guan political and economic affairs, especially by the United 
States, has resulted in various forms of populist and nationalist 
reactions. The legacy of the past can be seen today in the atti- 
tudes toward foreign influence. Although the upper and mid- 
dle classes tend to emulate North American life-styles and be 
supportive of United States policies, the Nicaraguan poor are 
highly suspicious of the culture and political intentions of the 
United States. 

Since precolonial times, Nicaragua's fertile Pacific coast has 
attracted settlers, thus concentrating most of the population in 
the western part of the country. Because of its proximity to the 
West Indies, the Caribbean coast historically has been the site 
of foreign intervention and non-Hispanic immigration by 
black and indigenous groups from the Caribbean and by Brit- 
ish settlers and pirates. The resulting diverse ethnic groups that 
today inhabit the Caribbean coast have for centuries resisted 
Hispanic Nicaraguan governments and demanded political 
autonomy. 

During most of the twentieth century, Nicaragua has suf- 
fered under dictatorial regimes. From the mid-1930s until 
1979, the Somoza family controlled the government, the mili- 
tary, and an ever expanding sector of the Nicaraguan economy. 
On July 19, 1979, Somoza rule came to an end after the tri- 
umph of an insurrection movement led by the Sandinista 
National Liberation Front (Frente Sandinista de Liberation 
Nacional — FSLN). However, the predominance of the FSLN 
led to the development of a different kind of authoritarian 
regime that lasted for more than a decade. 

During the 1980s, Nicaragua was the center of Cold War 
confrontation in the Western Hemisphere, with the former 
Soviet Union and Cuba providing assistance to the Sandinista 
(see Glossary) government, and the United States supporting 
antigovernment forces. A regional peace initiative brought an 
end to civil war in the late 1980s. The Sandinistas lost in the 



3 



Nicaragua: A Country Study 




Figure 2. Nicaragua in Its Central American Setting, 1993 



1990 elections, and a new government headed by President 
Violeta Barrios de Chamorro was installed in April 1990. 

Precolonial Period 

Present-day Nicaragua is located south of the pre-Colum- 
bian culture areas of the Maya and the Aztec in Mexico and 
northern Central America (see fig. 2; Glossary). Although con- 
ventional wisdom states that the culture of lower Central Amer- 
ica did not reach the levels of political or cultural development 
achieved in Mexico and northern Central America, recent 
excavations in Cuscutlatan, El Salvador, may prove that assump- 
tion erroneous. 

Two basic culture groups existed in precolonial Nicaragua. 
In the central highlands and Pacific coast regions, the native 
peoples were linguistically and culturally similar to the Aztec 
and the Maya. The oral history of the people of western Nicara- 
gua indicates that they had migrated south from Mexico sev- 
eral centuries before the arrival of the Spanish, a theory 



4 



Historical Setting 



supported by linguistic research. Most people of central and 
western Nicaragua spoke dialects of Pipil, a language closely 
related to Nahuatl, the language of the Aztec. The culture and 
food of the peoples of western Nicaragua also confirmed a link 
with the early inhabitants of Mexico; the staple foods of both 
populations were corn, beans, chili peppers, and avocados, still 
the most common foods in Nicaragua today. Chocolate was 
drunk at ceremonial occasions, and turkeys and dogs were 
raised for their meat. 

Most of Nicaragua's Caribbean lowlands area was inhabited 
by tribes that migrated north from what is now Colombia. The 
various dialects and languages in this area are related to Chib- 
cha, spoken by groups in northern Colombia. Eastern Nicara- 
gua's population consisted of extended families or tribes. Food 
was obtained by hunting, fishing, and slash-and-burn agricul- 
ture. Root crops (especially cassava), plantains, and pineapples 
were the staple foods. The people of eastern Nicaragua appear 
to have traded with and been influenced by the native peoples 
of the Caribbean, as round, thatched huts and canoes, both 
typical of the Caribbean, were common in eastern Nicaragua. 

When the Spanish arrived in western Nicaragua in the early 
1500s, they found three principal tribes, each with a different 
culture and language: the Niquirano, the Chorotegano, and 
the Chontal. Each of these diverse groups occupied much of 
Nicaragua's territory, led by independent chieftains (cacicazgos) 
who ruled according to each group's laws and customs. Their 
weapons consisted of swords, lances, and arrows made out of 
wood. Monarchy was the form of government of most tribes; 
the supreme ruler was the chief, or cacique, who, surrounded by 
his princes, formed the nobility. Laws and regulations were dis- 
seminated by royal messengers who visited each township and 
gave their chiefs orders to the assembled inhabitants. 

The Chontal (the term means foreigner) occupied the cen- 
tral mountain region. The Chontal were less numerous and 
culturally less advanced than the Niquirano and Chorotegano, 
who lived in well-established nation-states. Occupying the terri- 
tory between Lago de Nicaragua and the Pacific coast, the 
Niquirano were governed by several chiefs, one of whom, chief 
Nicarao, or Nicaragua, was a rich ruler who lived in Nicarao- 
cali, now the city of Rivas. The Chorotegano lived in the central 
region of Nicaragua. The Niquirano and Chorotegano had 
intimate contact with the Spanish conquerors, paving the way 
for the racial mix of native and European stock now known as 



5 



Nicaragua: A Country Study 

mestizos. The differences in the origin and level of civilization 
of the three groups led to frequent violent encounters, in 
which one group would displace whole tribes from their terri- 
tory, contributing to multiple divisions within each group. 

In the west and highland areas where the Spanish settled, 
the indigenous population was almost completely wiped out by 
the rapid spread of new diseases, for which the native popula- 
tion had no immunity, and the virtual enslavement of the 
remainder of the indigenous people. In the east, where the 
Europeans did not settle, most indigenous groups survived. 
The English, however, did introduce guns and ammunition to 
one of the local peoples, the Bawihka, who lived in northeast 
Nicaragua. The Bawihka later intermarried with runaway slaves 
from Britain's Caribbean possessions, and the resulting popula- 
tion, with its access to superior weapons, began to expand its 
territory and push other indigenous groups into the interior. 
This Afro-indigenous group became known to the Europeans 
as Miskito, and the displaced survivors of their expansionist 
activities were called the Sumu. 

Colonial Period, 1522-1820 

The Spanish Conquest 

Nicaragua's Caribbean coast was first seen by Spanish 
explorers in 1502. It was not until 1522, however, that a formal 
military expedition, under Gil Gonzalez Davila, led to the 
Spanish conquest of Nicaraguan territory. Gonzalez launched 
an expedition from Panama, arriving in Nicaragua through 
Costa Rica. After suffering both illness and torrential rains, he 
reached the land governed by the powerful chief Nicoya, who 
gave Gonzalez and his men a warm welcome. Soon thereafter, 
Nicoya and 6,000 of his people embraced the Roman Catholic 
faith. Gonzalez continued his exploration and arrived in the 
next settlement, which was governed by a chief named Nicara- 
gua, or Nicarao, after whom the country was named. Chief Nic- 
aragua received Gonzalez as a friend and gave him large 
quantities of gold. Perhaps to placate the Spanish, Nicaragua 
also converted to Roman Catholicism, as did more than 9,000 
members of his tribe. All were baptized within eight days. Con- 
fident of further success, Gonzalez moved on to the interior, 
where he encountered resistance from an army of 3,000 
Niquirano, led by another of their chiefs, Diriagen. Gonzalez 



6 



Central Square in Leon 
Courtesy Nicaraguan Tourism Institute 



7 



Nicaragua: A Country Study 

retreated and traveled south to the coast, returning to Panama 
with large quantities of gold and pearls. 

In 1523 the governor of Panama, Pedro Arias Davila 
(Pedrarias), appointed Francisco Hernandez de Cordoba to 
lead the Nicaraguan conquest effort. Hernandez de Cordoba 
led an expedition in 1524 that succeeded in establishing the 
first permanent Spanish settlement in Nicaragua. He quickly 
overcame the resistance of the native peoples and named the 
land Nicaragua. To deny Gonzalez's claims of settlement rights 
and prevent his eventual control of the region, Hernandez de 
Cordoba founded the cities of Leon and Granada, which later 
became the centers of colonial Nicaragua. From Leon, he 
launched expeditions to explore other parts of the territory. 
While the rivalry between Hernandez de Cordoba and 
Gonzalez raged, Pedrarias charged Hernandez de Cordoba 
with mismanagement and sentenced him to death. Gonzalez 
died soon thereafter, and the Spanish crown awarded Pedrarias 
the governorship of Nicaragua in 1528. Pedrarias stayed in Nic- 
aragua until his death in July 1531. 

Spain showed little interest in Nicaragua throughout this 
period, mostly because it was more interested in exploiting the 
vast riches found in Mexico and Peru. By 1531 many Spanish 
settlers in Nicaragua had left for South America to join Fran- 
cisco Pizarro's efforts to conquer the wealthy regions of the 
Inca Empire. Native Nicaraguan settlements also decreased in 
size because the indigenous inhabitants were exported to work 
in Peruvian mines; an estimated 200,000 native Nicaraguans 
were exported as slaves to South America from 1528 to 1540. 
Many Spanish towns founded in Nicaragua during the first 
years of the conquest disappeared. By the end of the 1500s, 
Nicaragua was reduced to the cities of Leon, located west of 
Lago de Leon (today Lago de Managua), and Granada, located 
on Lago de Nicaragua. 

Colonial Rule 

Although Nicaragua had been part of the audiencia (audi- 
ence or court) of Panama, established in 1538, it was trans- 
ferred to the Viceroyalty of New Spain when Spain divided its 
empire into two viceroyalties in 1543. The following year, the 
new audiencia of Guatemala, a subdivision of the Viceroyalty of 
New Spain, was created. This audiencia extended from south- 
ern Mexico through Panama and had its capital first at Gracias, 
Honduras, and then at Antigua, Guatemala, after 1549. In 1570 



8 



Historical Setting 



the audiencia was reorganized and reduced in size, losing the 
territory of present-day Panama, the Yucatan, and the Mexican 
state of Tabasco. 

The five-man audiencia, or court, was the highest govern- 
mental authority in the territory. During most of the colonial 
period, the president of the audiencia held the additional titles 
of governor and captain general (hence, the alternative name 
of Captaincy General of Guatemala) and was charged with 
administrative, judicial, and military authority. The governor, 
or captain general, was appointed by the Spanish king and was 
responsible to him; in fact, the colony was sometimes referred 
to as the Kingdom of Guatemala. 

The audiencia was divided into provinces for administrative 
purposes, and the leading official in each province was gener- 
ally called an alcalde mayor, or governor. Leon was the capital of 
the Province of Nicaragua, housing the local governor, the 
Roman Catholic bishop, and other important appointees. An 
elite of creole (individuals of Spanish descent born in the New 
World) merchants controlled the economic and political life of 
each province. Because of the great distance between the cen- 
ters of Spanish rule, political power was centered with the local 
government, the town council or ayuntamiento, which ignored 
most official orders from the Spanish crown. 

Throughout the seventeenth century, trade restrictions 
imposed by Spain, natural disasters, and foreign attacks devas- 
tated the economy of the Captaincy General of Guatemala. 
The local government neglected agricultural production; pow- 
erful earthquakes in 1648, 1651, and 1663 caused massive 
destruction in the Province of Nicaragua; and from 1651 to 
1689, Nicaragua was subjected to bloody incursions from 
English, French, and Dutch pirates. In 1668 and 1670, these 
buccaneers captured and destroyed the city of Granada, center 
of the province's agricultural wealth. The Captaincy General of 
Guatemala was generally neglected by Spain. Within the cap- 
taincy general, the Province of Nicaragua remained weak and 
unstable, ruled by persons with little interest in the welfare of 
its people. 

In the late 1600s, the Miskito, who lived in Nicaragua's Car- 
ibbean lowlands, began to be exploited by English "filibusters" 
(irregular military adventurers) intent on encroaching on 
Spanish landowners. In 1687 the English governor of Jamaica 
named a Miskito who was one of his prisoners, "King of the 
Mosquitia Nation," and declared the region to be under the 



9 



Nicaragua: A Country Study 

protection of the English crown. This event marked the begin- 
ning of a long rivalry between Spanish (and later Nicaraguan) 
and British authorities over the sovereignty of the Caribbean 
coast, which effectively remained under British control until 
the end of the nineteenth century. 

After more than a century of exploiting the mineral wealth 
of the New World, the Spanish realized that activities other 
than mining could be profitable. The Province of Nicaragua 
then began to experience economic growth based on export 
agriculture. By the early 1700s, a powerful elite was well estab- 
lished in the cities of Leon, Granada, and, to a lesser extent, 
Rivas. 

Events in Spain in the early 1700s were to have long-lasting 
repercussions in Nicaragua. The War of the Spanish Succession 
(1701-14) resulted in the Bourbons replacing the Habsburgs 
on the Spanish throne. The Habsburgs had supported strict 
trade monopolies, especially in the Spanish colonies. The 
Bourbons were proponents of more liberal free-trade policies. 
Throughout the captaincy general, groups were hurt or helped 
by these changes; the factions supporting changes in trading 
policy came to be known as liberals while those who had prof- 
ited under the old rules were known as conservatives. Liberals 
generally consisted of growers with new crops to sell, mer- 
chants, or export interests. Conservatives were generally com- 
posed of landowners who had profited under the old 
protectionism and who resisted new competition. In time, con- 
servatism also became associated with support for the Roman 
Catholic Church; the liberals took a more anticlerical stand. 

Throughout the captaincy general, cities came to be associ- 
ated with one or the other of these political factions, depend- 
ing on the basis of the economy of each. Typically, each of the 
five provinces of the captaincy general had one city that cham- 
pioned the liberal cause and another that spoke for the conser- 
vatives. In Nicaragua, Leon was primarily involved in exporting 
animal products such as leather and tallow and soon became 
the center for free-trading liberalism. The conservative elite in 
Granada, however, had made their fortunes under the old pro- 
tectionist system and resisted change. Competition between 
the two cities over influence on colonial policy became violent 
at times, and each city supported armed groups in order to 
defend itself and its ideas. In time, the hatred and violence 
between the two cities and the two factions became institution- 
alized, and often the original ideological difference was forgot- 



10 



Historical Setting 



ten. Independence in the next century only exacerbated the 
struggle as it eliminated Spain as a referee. The violent rivalry 
between liberals and conservatives was one of the most impor- 
tant and destructive aspects of Nicaraguan history, a character- 
istic that would last until well into the twentieth century. 
Politicians frequently chose party loyalty over national interest, 
and, particularly in the 1800s, the nation was often the loser in 
interparty strife. 

Liberal-conservative rivalry was not only a domestic issue 
but also an international one. The other provinces in the cap- 
taincy general, and later the successor nations, had similar lib- 
eral and conservative factions. Each faction did not hesitate to 
support its compatriots, often with armed force, in another 
province. After independence, the intercountry interference 
continued unabated; conservatives or liberals in each of the 
five successor states frequently sent troops to support like fac- 
tions in neighboring countries. This constant intervention and 
involvement in its neighbors' affairs was a second and equally 
pernicious characteristic of Nicaraguan politics throughout its 
independent existence. 

Nineteenth Century 

National Independence, 1821-57 

Spain's control over its colonies in the New World was 
threatened in the early 1800s by the struggle for national inde- 
pendence throughout the entire region. Weakened by the 
French invasion in 1794 and internal upheaval, Spain tried to 
hold onto its richest colonies, which led to even further neglect 
of its poorer Central American territories. Resentment toward 
the Spanish-born elite (peninsulares — those born in Spain and 
the only persons allowed to administer Spanish colonies) grew 
among Nicaraguan Creoles. The first local movements against 
Spanish rule in Central America occurred in 1811, when the 
Province of El Salvador staged a revolt. Peninsular authorities 
were deposed and replaced by Creoles, who demanded less 
repressive laws. Although the Province of Nicaragua officially 
refused to join the rebellion, a popular uprising soon broke 
out. Violence and political rivalry prevailed in all of the Central 
American colonies during the ensuing decade. 

Establishment of an independent Nicaragua came in stages. 
The first stage occurred in 1821 when the Captaincy General of 
Guatemala formally declared its independence from Spain on 



11 



Nicaragua: A Country Study 

September 15, which is still celebrated as independence day. At 
first the captaincy general was part of the Mexican Empire 
under General Agustin de Iturbide, but efforts by Mexico to 
control the region were resisted all over Central America. Sepa- 
ratist feelings throughout the isthmus grew, and five of the 
United Provinces of Central America — Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua — declared their inde- 
pendence from Mexico in July 1823. The sixth province, Chia- 
pas, opted to remain with Mexico. Under a weak federal 
government, each province created its own independent inter- 
nal administration. Inadequate communication and internal 
conflicts, however, overshadowed efforts to institutionalize the 
federation for the next decade and a half. Efforts to centralize 
power led to civil war between 1826 and 1829. The federation 
finally dissolved in 1837, and a Constituent Assembly (see Glos- 
sary) formally declared Nicaragua's independence from the 
United Provinces of Central America on April 30, 1838. 

Foreign Intervention, 1850-68 

British and United States interests in Nicaragua grew during 
the mid-1 800s because of the country's strategic importance as 
a transit route across the isthmus. British settlers seized the 
port of San juan del Norte — at the mouth of the Rfo San Juan 
on the southern Caribbean coast — and expelled all Nicaraguan 
officials on January 1, 1848. The following year, Britain forced 
Nicaragua to sign a treaty recognizing British rights over the 
Miskito on the Caribbean coast. Britain's control over much of 
the Caribbean lowlands, which the British called the Mosquito 
Coast (present-day Costa de Mosquitos), from 1678 until 1894 
was a constant irritant to Nicaraguan nationalists. The start of 
the gold rush in California in 1849 increased United States 
interests in Central America as a transoceanic route, and Nica- 
ragua at first encouraged a United States presence to counter- 
balance the British. 

The possibility of economic riches in Nicaragua attracted 
international business development. Afraid of Britain's colonial 
intentions, Nicaragua held discussions with the United States 
in 1849, leading to a treaty that gave the United States exclusive 
rights to a transit route across Nicaragua. In return, the United 
States promised to protect Nicaragua from other foreign inter- 
vention. On June 22, 1849, the first official United States repre- 
sentative, Ephraim George Squier, arrived in Nicaragua. Both 
liberals and conservatives welcomed the United States diplo- 



12 



«0* 



Colonial architecture in 
Granada 
Courtesy Nicaraguan 
Tourism Institute 




mat. A contract between Commodore Cornelius Vanderbilt, a 
United States businessman, and the Nicaraguan government 
was signed on August 26, 1849, granting Vanderbilt's com- 
pany — the Accessory Transit Company — exclusive rights to 
build a transisthmian canal within twelve years. The contract 
also gave Vanderbilt exclusive rights, while the canal was being 
completed, to use a land-and-water transit route across Nicara- 
gua, part of a larger scheme to move passengers from the east- 
ern United States to California. The westbound journey across 
Nicaragua began by small boat from San Juan del Norte on the 
Caribbean coast, traveled up the Rio San Juan to San Carlos on 
Lago de Nicaragua, crossed Lago de Nicaragua to La Virgen on 
the west shore, and then continued by railroad or stagecoach 
to San Juan del Sur on the Pacific coast. In September 1849, 
the United States-Nicaragua treaty, along with Vanderbilt's con- 
tract, was approved by the Nicaraguan Congress. 

British economic interests were threatened by the United 
States enterprise led by Vanderbilt, and violence erupted in 
1850 when the British tried to block the operations of the 
Accessory Transit Company As a result, United States and Brit- 
ish government officials held diplomatic talks and on April 19, 
1850, without consulting the Nicaraguan government, signed 
the Clayton-Bulwer Treaty, in which both countries agreed that 
neither would claim exclusive power over a future canal in Cen- 



13 



Nicaragua: A Country Study 

tral America nor gain exclusive control over any part of the 
region. Although the Nicaraguan government originally 
accepted the idea of a transit route because of the economic 
benefit it would bring Nicaragua, the operation remained 
under United States and British control. Britain retained con- 
trol of the Caribbean port of San Juan del Norte, and the 
United States owned the vessels, hotels, restaurants, and land 
transportation along the entire transit route. 

Continued unrest in the 1850s set the stage for two addi- 
tional elements in Nicaragua history: frequent United States 
military interventions in Nicaragua and a propensity for Nica- 
raguan politicians to call on the United States to settle domes- 
tic disputes. In 1853 conservative General Fruto Chamorro had 
taken over the government and exiled his leading liberal oppo- 
nents. Aided by the liberal government in neighboring Hondu- 
ras, an exile army entered Nicaragua on May 5, 1854. The 
subsequent conflict proved prolonged and bloody; Chamorro 
declared that his forces would execute all armed rebels who fell 
into their hands, and the liberal leader, General Maximo Jerez, 
proclaimed that all government supporters were traitors to the 
nation. 

The liberals enjoyed initial success in the fighting, but the 
tide turned in 1854 when Guatemala's conservative govern- 
ment invaded Honduras, forcing that nation to end its support 
of the liberals in Nicaragua. Chamorro's death from natural 
causes in March 1855 brought little respite to the beleaguered 
liberals, who began to look abroad for support. They turned to 
William Walker, a soldier of fortune from Tennessee who had 
previously invaded Mexico. Through an agent, they offered 
Walker funds and generous land grants if he would bring a 
force of United States adventurers to their aid. Walker leaped 
at the chance — he quickly recruited a force of fifty-six followers 
and landed with them in Nicaragua on May 4, 1855. 

Walker's initial band was soon reinforced by other recruits 
from the United States. Strengthened by this augmented force, 
Walker seized Granada, center of conservative power. The 
stunned conservative government surrendered, and the 
United States quickly recognized a new puppet liberal govern- 
ment with Patricio Rivas as president. Real power, however, 
remained with Walker, who had assumed command of the Nic- 
araguan army. 

As Walker's power and the size of his army grew, conserva- 
tive politicians throughout Central America became increas- 



14 



Historical Setting 



ingly anxious. Encouraged by Britain, the conservative 
governments of the other four Central American republics 
agreed to send troops to Nicaragua. In March 1856, Costa Rica 
declared war on the North American filibuster, but an epi- 
demic of cholera decimated the Costa Rican forces and forced 
their withdrawal. Encouraged by this victory, Walker began 
plans to have himself elected president and to encourage colo- 
nization of Nicaragua by North Americans. This scheme was 
too much even for his puppet president Rivas, who broke with 
Walker and his followers and sent messages to Guatemala and 
El Salvador requesting their help in expelling the filibusters. 

Undeterred, Walker proceeded to hold a farcical election 
and install himself as president. Making English the country's 
official language and legalizing slavery, Walker also allied him- 
self with Vanderbilt's rivals in the contest for control of the 
transit route, hoping that this alliance would provide both 
funds and transportation for future recruits. His call for Nica- 
ragua's annexation by the United States as a slave state gar- 
nered some support from United States proslavery forces. 

In the meantime, forces opposing Walker were rapidly gain- 
ing the upper hand, leading him to attack his liberal allies, 
accusing them of half-hearted support. Most Nicaraguans were 
offended by Walker's proslavery, pro-United States stance; 
Vanderbilt was determined to destroy him, and the rest of Cen- 
tral America actively sought his demise. The British also 
encouraged opposition to Walker as a means of curbing United 
States influence in the region. Even the United States govern- 
ment, fearful that plans to annex Nicaragua as a new slave state 
would fan the fires of sectional conflict growing within the 
United States, became opposed to his ambitions. 

The struggle to expel Walker and his army from Nicaragua 
proved to be long and costly. In the process, the colonial city of 
Granada was burned, and thousands of Central Americans lost 
their lives.The combined opposition of Vanderbilt, the British 
Navy, and the forces of all of Central America, however, eventu- 
ally defeated the filibusters. A key factor in Walker's defeat was 
the Costa Rican seizure of the transit route; the seizure permit- 
ted Walker's opponents to take control of the steamers on Lago 
de Nicaragua and thereby cut off much of Walker's access to 
additional recruits and finances. Vanderbilt played a major role 
in this effort and also supplied funds that enabled the Costa 
Ricans to offer free return passage to the United States to any 
of the filibusters who would abandon the cause. Many took 



15 



Nicaragua: A Country Study 

advantage of this opportunity, and Walker's forces began to 
dwindle. 

The final battle of what Nicaraguans called the "National 
War" (1856-57) took place in the spring of 1857 in the town of 
Rivas, near the Costa Rican border. Walker beat off the attacks 
of the Central Americans, but the strength and morale of his 
forces were declining, and it would be only a matter of time 
until he would be overwhelmed. At this point, Commander 
Charles H. Davis of the United States Navy, whose ship had 
been sent to Nicaragua's Pacific coast to protect United States 
economic interests, arranged a truce. On May 1, 1857, Walker 
and his remaining followers, escorted by a force of United 
States marines, evacuated Rivas, marched down to the coast, 
and took the ships back to the United States. 

Walker's forced exile was short-lived, however; he made four 
more attempts to return to Central America (in 1857, 1858, 
1859, and 1860). In 1860 Walker was captured by a British war- 
ship as he tried to enter Honduras. The British Navy turned 
him over to local authorities, and he was executed by a Hondu- 
ran firing squad. Walker's activities provided Nicaraguans with 
a long-lasting suspicion of United States activities and designs 
upon their nation. 

Originally a product of interparty strife, the National War 
ironically served as a catalyst for cooperation between the lib- 
eral and conservative parties. The capital was moved to Man- 
agua in an effort to dampen interparty conflict, and on 
September 12, 1856, both parties had signed an agreement to 
join efforts against Walker. This pact marked the beginning of 
an era of peaceful coexistence between Nicaragua's political 
parties, although the onus of the liberals' initial support of 
Walker allowed the conservatives to rule Nicaragua for the next 
three decades. After Walker's departure, Patricio Rivas served 
as president for the third time. He remained in office until 
June 1857, when liberal General Maximo Jerez and conserva- 
tive General Tomas Martinez assumed a bipartisan presidency. 
A Constituent Assembly convened in November of that year 
and named General Martinez as president (1858-67). 

The devastation and instability caused by the war in Nicara- 
gua, as well as the opening of a railroad across Panama, 
adversely affected the country's transit route. After only a few 
years of operation in the early 1850s, the transit route was 
closed for five years from 1857 to 1862, and the entire effort 
was subsequently abandoned in April 1868. Despite the failure 



16 



Historical Setting 



of the transit plan, United States interest in building a canal 
across Nicaragua persisted throughout most of the nineteenth 
century. By 1902, however, there was increasing support from 
the administration of United States president Theodore 
Roosevelt to build a transisthmian canal in Panama. The open- 
ing of the Panama Canal in 1914 effectively ended serious dis- 
cussion of a canal across Nicaragua. 

Conservative and Liberal Regimes, 1858-1909 

The Conservative Party (Partido Conservador) ruled in Nic- 
aragua from 1857 to 1893, a period of relative economic 
progress and prosperity sometimes referred to as the "Thirty 
Years." A railroad system connecting the western part of Nicara- 
gua with the port of Corinto on the Pacific coast was built, and 
roads and telegraph lines were extended. Exports of agricul- 
tural products also increased during this period. Coffee as an 
export commodity grew between the 1850s and the 1870s, and 
by 1890 coffee had become the nation's principal export. 
Toward the end of the 1800s, Nicaragua experienced dramatic 
economic growth because of the growing demand for coffee 
and bananas in the international market. The local economic 
elites were divided between the established cattle raisers and 
small growers and the new coffee-producers sector. Disputes 
about national economic policy arose between these powerful 
elites. Revealing their sympathies, the ruling conservatives 
passed laws favoring cheap labor that benefited mostly coffee 
planters. 

The period of relative peace came to an end in 1891 when 
Roberto Sacasa, who had succeeded to the presidency in 1889 
after the death of the elected incumbent, was elected to a term 
of his own. Although a conservative, Sacasa was from Leon, not 
Granada, and his election produced a split within the ruling 
Conservative Party. When Sacasa attempted to retain power 
after the March 1893 end of his term, the liberals, led by Gen- 
eral Jose Santos Zelaya, quickly took advantage of the division 
within conservative ranks. 

A revolt began in April 1893 when a coalition of liberals and 
dissident conservatives ousted Sacasa and installed another 
conservative in office. An effort was made to share power with 
the liberals, but this coalition soon proved unworkable. In July, 
Zelaya's liberal supporters resigned from the government and 
launched another revolt, which soon proved successful. A con- 
stitutional convention was hurriedly called, and a new constitu- 



17 



Nicaragua: A Country Study 



tion incorporating anticlerical provisions, limitations on 
foreigners' rights to claim diplomatic protection, and abolition 
of the death penalty was adopted. Zelaya was confirmed as 
president, a post he would retain until 1909. 

Zelaya's rule proved to be one of the most controversial 
periods in Nicaraguan history. Zelaya was a ruthless dictator 
who managed to stay in power for sixteen years despite foreign 
and domestic opposition. Nevertheless, he was responsible for 
the creation of a professional army and the growth of strong 
nationalist feelings. 

Zelaya opened the country to foreign investment, expanded 
coffee production, and boosted banana exports. His govern- 
ment promoted internal development and modernized Nicara- 
gua's infrastructure. During his tenure, new roads and seaport 
facilities were constructed, railroad lines were extended, and 
many government buildings and schools were built. The prolif- 
eration of United States companies in Nicaragua grew to the 
point that, by the early 1900s, United States firms controlled 
most of the production of coffee, bananas, gold, and lumber. 

Zelaya's administration was also responsible for an agree- 
ment ending the Nicaraguan dispute with Britain over sover- 
eignty of the Caribbean coast. Aided by the mediation of the 
United States and strong support from the other Central Amer- 
ican republics, control over the Caribbean coast region was 
finally awarded to Nicaragua in 1894. Sovereignty did not bring 
the government in Managua control over this region, however; 
the Caribbean coast remained culturally separate and inaccessi- 
ble to the western part of the country. Although his reputation 
was boosted by resolution of the centuries-old dispute with Brit- 
ain, Zelaya was regarded with suspicion abroad. His imperialis- 
tic ambitions in Central America, as well as his vocal rebukes of 
United States intervention and influence in Central America, 
won him little support. Zelaya's nationalist anti-United States 
stance drove him to call upon the Germans and Japanese to 
compete with the United States for rights to a canal route. 
Opposition to these schemes from the conservative faction, 
mostly landowners, led Zelaya to increase repression. In 1903 a 
major conservative rebellion, led by Emiliano Chamorro Var- 
gas, broke out. Another uprising in 1909, this time aided by 
British money and the United States marines, was successful in 
driving Zelaya from power. 



18 



Historical Setting 



The Early Twentieth Century and the Somoza Years, 
1909-79 

United States Intervention, 1909-33 

United States interest in Nicaragua, which had waned dur- 
ing the last half of the 1800s because of isolationist sentiment 
following the United States Civil War (1861-65), grew again 
during the final years of the Zelaya administration. Angered by 
the United States choice of Panama for the site of a transisth- 
mian canal, President Zelaya made concessions to Germany 
and Japan for a competing canal across Nicaragua. Relations 
with the United States deteriorated, and civil war erupted in 
October 1909, when anti-Zelaya liberals joined with a group of 
conservatives under Juan Estrada to overthrow the govern- 
ment. The United States broke off elations with the Zelaya 
administration after two United States mercenaries serving 
with the rebels were captured and executed by government 
forces. Soon thereafter, 400 United States marines landed on 
the Caribbean coast. Weakened and pressured by both domes- 
tic and external forces, Zelaya resigned on December 17, 1909. 
His minister of foreign affairs, Jose Madriz, was appointed pres- 
ident by the Nicaraguan Congress. A liberal from Leon, Madriz 
was unable to restore order because of continuing pressure 
from conservatives and the United States forces, and he 
resigned on August 20, 1910. 

Conservative Estrada, governor of Nicaragua's easternmost 
department, assumed power after Madriz's resignation. The 
United States agreed to support Estrada, provided that a Con- 
stituent Assembly was elected to write a constitution. After 
agreeing with this stipulation, a coalition conservative-liberal 
regime, headed by Estrada, was recognized by the United 
States on January 1, 1911. Political differences between the two 
parties soon surfaced, however, and minister of war General 
Luis Mena forced Estrada to resign. Estrada's vice president, 
the conservative Adolfo Diaz, then became president. In mid- 
1912 Mena persuaded a Constituent Assembly to name him 
successor to Diaz when Diaz's term expired in 1913. When the 
United States refused to recognize the Constituent Assembly's 
decision, Mena rebelled against the Diaz government. A force 
led by liberal Benjamin Zelaydon quickly came to the aid of 
Mena. Diaz, relying on what was becoming a time-honored tra- 
dition, requested assistance from the United States. In August 



19 



Nicaragua: A Country Study 

1912, a force of 2,700 United States marines once again landed 
at the ports of Corinto and Bluefields. Mena fled the country, 
and Zelaydon was killed. 

The United States kept a contingent force in Nicaragua 
almost continually from 1912 until 1933. Although reduced to 
100 in 1913, the contingent served as a reminder of the willing- 
ness of the United States to use force and its desire to keep con- 
servative governments in power. Under United States 
supervision, national elections were held in 1913, but the liber- 
als refused to participate in the electoral process, and Adolfo 
Diaz was reelected to a full term. Foreign investment decreased 
during this period because of the high levels of violence and 
political instability. Nicaragua and the United States signed but 
never ratified the Castillo-Knox Treaty in 1914, giving the 
United States the right to intervene in Nicaragua to protect 
United States interests. A modified version omitting the inter- 
vention clause, the Chamorro-Bryan Treaty, was finally ratified 
by the United States Senate in 1916. This treaty gave the 
United States exclusive rights to build an interoceanic canal 
across Nicaragua. Because the United States had already built 
the Panama Canal, however, the terms of the Chamorro-Bryan 
Treaty served the primary purpose of securing United States 
interests against potential foreign countries — mainly Germany 
or Japan — building another canal in Central America. The 
treaty also transformed Nicaragua into a near United States 
protectorate. 

Collaboration with the United States allowed the conserva- 
tives to remain in power until 1925. The liberals boycotted the 
1916 election, and conservative Emiliano Chamorro was 
elected with no opposition. The liberals did participate in the 
1920 elections, but the backing of the United States and a 
fraudulent vote count assured the election of Emiliano 
Chamorro's uncle, Diego Manuel Chamorro. 

A moderate conservative, Carlos Solorzano, was elected 
president in open elections in 1924, with liberal Juan Bautista 
Sacasa as his vice president. After taking office on January 1, 
1925, Solorzano requested that the United States delay the 
withdrawal of its troops from Nicaragua. Nicaragua and the 
United States agreed that United States troops would remain 
while United States military instructors helped build a national 
military force. In June, Solorzano's government contracted 
with retired United States Army Major Calvin B. Carter to 
establish and train the National Guard. The United States 



20 



Historical Setting 



marines left Nicaragua in August 1925. However, President 
Solorzano, who had already purged the liberals from his coali- 
tion government, was subsequently forced out of power in 
November 1925 by a conservative group who proclaimed Gen- 
eral Emiliano Chamorro (who had also served as president 
from 1917 to 1921), as president in January 1926. 

Fearing a new round of conservative-liberal violence and 
worried that a revolution in Nicaragua might result in a leftist 
victory, which had happened a few years earlier in Mexico, the 
United States sent marines, who landed on the Caribbean coast 
in May 1926, ostensibly to protect United States citizens and 
property. United States authorities in Nicaragua mediated a 
peace agreement between the liberals and the conservatives in 
October 1926. Chamorro resigned, and the Nicaraguan Con- 
gress elected Adolfo Diaz as president (Diaz had previously 
served as president, 1911-16). Violence resumed, however, 
when former vice president Sacasa returned from exile to 
claim his rights to the presidency. In April 1927, the United 
States sent Henry L. Stimson to mediate the civil war. Once in 
Nicaragua, Stimson began conversations with President Diaz as 
well as with leaders from both political parties. Stimson's meet- 
ings with General Jose Maria Moncada, the leader of the liberal 
rebels, led to a peaceful solution of the crisis. On May 20, 1927, 
Moncada agreed to a plan in which both sides — the govern- 
ment and Moncada's liberal forces — would disarm. In addition, 
a nonpartisan military force would be established under 
United States supervision. This accord was known as the Pact of 
Espino Negro. 

As part of the agreement, President Diaz would finish his 
term, and United States forces would remain in Nicaragua to 
maintain order and supervise the 1928 elections. A truce 
between the government and the rebels remained in effect and 
included the disarmament of both liberal rebels and govern- 
ment troops. Sacasa, who refused to sign the agreement, left 
the country. United States forces took over the country's mili- 
tary functions and strengthened the Nicaraguan National 
Guard. 

A rebel liberal group under the leadership of Augusto Cesar 
Sandino also refused to sign the Pact of Espino Negro. An ille- 
gitimate son of a wealthy landowner and a mestizo servant, San- 
dino had left his father's home early in his youth and traveled 
to Honduras, Guatemala, and Mexico. During his three-year 
stay in Tampico, Mexico, Sandino had acquired a strong sense 



21 



Nicaragua: A Country Study 

of Nicaraguan nationalism and pride in his mestizo heritage. 
At the urging of his father, Sandino had returned to Nicaragua 
in 1926 and settled in the department of Nueva Segovia, where 
he worked at a gold mine owned by a United States company. 
Sandino, who lectured the mine workers about social inequali- 
ties and the need to change the political system, soon orga- 
nized his own army, consisting mostly of peasants and workers, 
and joined the liberals fighting against the conservative regime 
of Chamorro. Highly distrusted by Moncada, Sandino set up 
hit-and-run operations against conservative forces indepen- 
dently of Moncada's liberal army. After the United States medi- 
ated the agreement between liberal forces and the conservative 
regime, Sandino, calling Moncada a traitor and denouncing 
United States intervention, reorganized his forces as the Army 
for the Defense of Nicaraguan Sovereignty (Ejercito Defensor 
de la Soberama de Nicaragua — EDSN). Sandino then staged 
an independent guerrilla campaign against the government 
and United States forces. Although Sandino's original inten- 
tions were to restore constitutional government under Sacasa, 
after the Pact of Espino Negro agreement his objective became 
the defense of Nicaraguan sovereignty against the United 
States. Receiving his main support from the rural population, 
Sandino resumed his battle against United States troops. At the 
height of his guerrilla campaign, Sandino claimed to have 
some 3,000 soldiers in his army, although official figures esti- 
mated the number at only 300. Sandino's guerrilla war caused 
significant damage in the Caribbean coast and mining regions. 
After debating whether to continue direct fighting against San- 
dino's forces, the United States opted to develop the nonparti- 
san Nicaraguan National Guard to contain internal violence. 
The National Guard would soon become the most important 
power in Nicaraguan politics. 

The late 1920s and early 1930s saw the growing power of 
Anastasio "Tacho" Somoza Garcia, a leader who would create a 
dynasty that ruled Nicaragua for four and a half decades. 
Moncada won the presidency in 1928 in one of the most honest 
elections ever held in Nicaragua. For the 1932 elections, the 
liberals nominated Juan Bautista Sacasa and the conservatives, 
Adolfo Diaz. Sacasa won the elections and was installed as pres- 
ident on January 2, 1933. In the United States, popular opposi- 
tion to the Nicaraguan intervention rose as United States 
casualty lists grew. Anxious to withdraw from Nicaraguan poli- 
tics, the United States turned over command of the National 



22 



poster of Sandino hangs in front of the facade of the 

Managua Cathedral. 
Courtesy Edmundo Fhres 



23 



Nicaragua: A Country Study 

Guard to the Nicaraguan government, and United States 
marines left the country soon thereafter. President Sacasa, 
under pressure from General Moncada, appointed Somoza 
Garcia as chief director of the National Guard. Somoza Garcia, 
a close friend of Moncada and nephew of President Sacasa, had 
supported the liberal revolt in 1926. Somoza Garcia also 
enjoyed support from the United States government because 
of his participation at the 1927 peace conference as one of 
Stimson's interpreters. Having attended school in Philadelphia 
and been trained by United States marines, Somoza Garcia, 
who was fluent in English, had developed friends with military, 
economic, and political influence in the United States. 

After United States troops left Nicaragua in January 1933, 
the Sacasa government and the National Guard still were 
threatened by Sandino's EDSN. True to his promise to stop 
fighting after United States marines had left the country, Sand- 
ino agreed to discussions with Sacasa. In February 1934, these 
negotiations began. During their meetings, Sacasa offered San- 
dino a general amnesty as well as land and safeguards for him 
and his guerrilla forces. However, Sandino, who regarded the 
National Guard as unconstitutional because of its ties to the 
United States military, insisted on the guard's dissolution. His 
attitude made him very unpopular with Somoza Garcia and his 
guards. Without consulting the president, Somoza Garcia gave 
orders for Sandino's assassination, hoping that this action 
would help him win the loyalty of senior guard officers. On 
February 21, 1934, while leaving the presidential palace after a 
dinner with President Sacasa, Sandino and two of his generals 
were arrested by National Guard officers acting under Somoza 
Garcia's instructions. They were then taken to an airfield in 
Managua, executed, and buried in unmarked graves. Despite 
Sacasa's strong disapproval of Somoza Garcia's action, the Nica- 
raguan president was too weak to contain the National Guard 
director. After Sandino's execution, the National Guard 
launched a ruthless campaign against Sandino's supporters. In 
less than a month, Sandino's army was totally destroyed. 

President Sacasa's popularity decreased as a result of his 
poor leadership and accusations of fraud in the 1934 congres- 
sional elections. Somoza Garcia benefited from Sacasa's dimin- 
ishing power, while at the same time he brought together the 
National Guard and the Liberal Party (Partido Liberal — PL) in 
order to win the presidential elections in 1936. Somoza Garcia 



24 



Historical Setting 



also cultivated support from former presidents Moncada and 
Chamorro while consolidating control within the Liberal Party. 

Early in 1936, Somoza Garcia openly confronted President 
Sacasa by using military force to displace local government offi- 
cials loyal to the president and replacing them with close asso- 
ciates. Somoza Garcia's increasing military confrontation led to 
Sacasa's resignation on June 6, 1936. The Congress appointed 
Carlos Brenes Jarqum, a Somoza Garcia associate, as interim 
president and postponed presidential elections until Decem- 
ber. In November, Somoza Garcia officially resigned as chief 
director of the National Guard, thus complying with constitu- 
tional requirements for eligibility to run for the presidency. 
The Liberal Nationalist Party (Partido Liberal Nacionalista — 
PLN) was established with support from a faction of the Con- 
servative Party to support Somoza Garcia's candidacy. Somoza 
Garcia was elected president in the December election by the 
remarkable margin of 107,201 votes to 108. On January 1, 
1937, Somoza Garcia resumed control of the National Guard, 
combining the roles of president and chief director of the mili- 
tary. Thus, Somoza Garcia established a military dictatorship, 
in the shadows of democratic laws, that would last more than 
four decades. 

The Somoza Era, 1 936-74 

Somoza Garcia controlled political power, directly as presi- 
dent or indirectly through carefully chosen puppet presidents, 
from 1936 until his assassination in 1956. A cynical and oppor- 
tunistic individual, Somoza Garcia ruled Nicaragua with a 
strong arm, deriving his power from three main sources: the 
ownership or control of large portions of the Nicaraguan econ- 
omy, the military support of the National Guard, and his accep- 
tance and support from the United States. His excellent 
command of the English language and understanding of 
United States culture, combined with a charming personality 
and considerable political talent and resourcefulness, helped 
Somoza Garcia win many powerful allies in the United States. 
Through large investments in land, manufacturing, transport, 
and real estate, he enriched himself and his close friends. 

After Somoza Garcia won in the December 1936 presiden- 
tial elections, he diligently proceeded to consolidate his power 
within the National Guard, while at the same time dividing his 
political opponents. Family members and close associates were 
given key positions within the government and the military. 



25 



Nicaragua: A Country Study 

The Somoza family also controlled the PLN, which in turn con- 
trolled the legislature and judicial system, thus giving Somoza 
Garcia absolute power over every sphere of Nicaraguan poli- 
tics. Nominal political opposition was allowed as long as it did 
not threaten the ruling elite. Somoza Garcia's National Guard 
repressed serious political opposition and antigovernment 
demonstrations. The institutional power of the National Guard 
grew in most government-owned enterprises, until eventually it 
controlled the national radio and telegraph networks, the 
postal and immigration services, health services, the internal 
revenue service, and the national railroads. In less than two 
years after his election, Somoza Garcia, defying the Conserva- 
tive Party, declared his intention to stay in power beyond his 
presidential term. Thus, in 1938 Somoza Garcia named a Con- 
stituent Assembly that gave the president extensive power and 
elected him for another eight-year term. 

Somoza Garcia's opportunistic support of the Allies during 
World War II benefited Nicaragua by injecting desperately 
needed United States funds into the economy and increasing 
military capabilities. Nicaragua received relatively large 
amounts of military aid and enthusiastically integrated its econ- 
omy into the wartime hemispheric economic plan, providing 
raw materials in support of the Allied war effort. Exports of 
timber, gold, and cotton soared. However, because more than 
90 percent of all exports went to the United States, the growth 
in trade also increased the country's economic and political 
dependence. 

Somoza Garcia built an immense fortune for himself and 
his family during the 1940s through substantial investments in 
agricultural exports, especially in coffee and cattle. The gov- 
ernment also confiscated German properties and then sold 
them to Somoza Garcia and his family at ridiculously low 
prices. Among his many industrial enterprises, Somoza Garcia 
owned textile companies, sugar mills, rum distilleries, the mer- 
chant marine lines, the national Nicaraguan Airlines (Lineas 
Aereas de Nicaragua — Lanica) , and La Salud dairy — the coun- 
try's only pasteurized milk facility. Somoza Garcia also gained 
large profits from economic concessions to national and for- 
eign companies, bribes, and illegal exports. By the end of 
World War II, Somoza Garcia had amassed one of the largest 
fortunes in the region — an estimated US$60 million. 

After World War II, however, widespread domestic and 
international opposition to the Somoza Garcia dictatorship 



26 



Historical Setting 



grew among political parties, labor, business groups, and the 
United States government. Somoza Garcia's decision to run for 
reelection in 1944 was opposed by some liberals, who estab- 
lished the Independent Liberal Party (Partido Liberal Inde- 
pendiente — PLI). Somoza Garcia's reelection was also opposed 
by the United States government. The dictator reacted to grow- 
ing criticism by creating a puppet government to save his rule. 
He decided not to run for reelection and had the PLN nomi- 
nate the elderly Leonardo Arguello, believing he could control 
Arguello from behind the scenes. Arguello ran against Enoc 
Aguado, a candidate supported by a coalition of political par- 
ties that included the conservatives and the PLI. Despite the 
large support for the Aguado candidacy, Somoza Garcia sub- 
verted the electoral process by using government resources 
and the National Guard to ensure the electoral victory of his 
candidate. Arguello was sworn in on May 1, 1947, and Somoza 
Garcia remained as chief director of the National Guard. 

Arguello had no intention of being a puppet, however, and 
in less than a month, when Arguello's measures began to chal- 
lenge Somoza Garcia's power, the National Guard chief staged 
a coup and placed a family associate, Benjamin Lacayo Sacasa, 
in the presidency. The administration of United States presi- 
dent Harry S. Truman responded by withholding diplomatic 
recognition from the new Nicaraguan government. In an effort 
to legitimize the new regime and win United States support, 
Somoza Garcia named a Constituent Assembly to write a new 
constitution. The assembly then appointed Somoza Garcia's 
uncle, Victor Roman Reyes, as president. The constitution of 
1947 was carefully crafted with strong anticommunist rhetoric 
to win United States support. Despite efforts by Somoza Garcia 
to placate the United States, the United States continued its 
opposition and refused to recognize the new regime. Under 
diplomatic pressure from the rest of Latin America, formal dip- 
lomatic relations between Managua and Washington were 
restored in mid-1948. 

Despite its anticommunist rhetoric, the government pro- 
moted liberal labor policies to gain support from the commu- 
nist party of Nicaragua, known as the Nicaraguan Socialist 
Party (Partido Socialista Nicaraguense — PSN), and thwarted 
the establishment of any independent labor movement. The 
government approved several progressive laws in 1945 to win 
government support from labor unions. Concessions and 
bribes were granted to labor leaders, and antigovernment 



27 



Nicaragua: A Country Study 

union leaders were displaced in favor of Somoza Garcia loyal- 
ists. However, after placement of pro-Somoza Garcia leaders in 
labor unions, most labor legislation was ignored. In 1950 
Somoza Garcia signed an agreement with conservative general 
Emiliano Chamorro Vargas that assured the Conservative Party 
of one-third of the congressional delegates as well as limited 
representation in the cabinet and in the courts. Somoza Garcia 
also promised clauses in the new 1950 constitution guarantee- 
ing "commercial liberty." This measure brought back limited 
support from the traditional elite to the Somoza Garcia 
regime. The elite benefited from the economic growth of the 
1950s and 1960s, especially in the cotton and cattle export sec- 
tors. Somoza Garcia again was elected president in general 
elections held in 1950. In 1955 Congress amended the consti- 
tution to allow his reelection for yet another presidential term. 

Somoza Garcia had many political enemies, and coups 
against him were attempted periodically, even within the 
National Guard. For protection, he constructed a secure com- 
pound within his residence and kept personal bodyguards, 
independent of the National Guard, with him wherever he 
went. Nevertheless, on September 21, 1956, while attending a 
PLN party in Leon to celebrate his nomination for the presi- 
dency, Somoza Garcia was fatally wounded by Rigoberto Lopez 
Perez, a twenty-seven-year-old Nicaraguan poet who had man- 
aged to pass through Somoza Garcia's security. The dictator 
was flown to the Panama Canal Zone, where he died eight days 
later. 

Somoza Garcia was succeeded as president by his eldest son, 
Luis Somoza Debayle. A United States-trained engineer, 
Somoza Debayle was first elected as a PLN delegate in 1950 and 
by 1956 presided over the Nicaraguan Congress. After his 
father's death, he assumed the position of interim president, as 
prescribed in the constitution. His brother Anastasio "Tachito" 
Somoza Debayle, a West Point graduate, took over leadership 
of the National Guard. A major political repression campaign 
followed Somoza Garcia's assassination: many political oppo- 
nents were tortured and imprisoned by guards under orders 
from Anastasio Somoza Debayle and the government imposed 
press censorship and suspended many civil liberties. When the 
Conservative Party refused to participate in the 1957 elec- 
tions — in protest against government restrictions on civil liber- 
ties — the Somoza brothers created a puppet opposition party, 
the National Conservative Party (Partido Conservador Nacio- 



28 



Historical Setting 



nal — PCN), to give a democratic facade to the political cam- 
paign. Luis Somoza Debayle won the presidency in 1957 with 
little opposition. During his six-year term, from 1957 to 1963, 
his government provided citizens with some freedoms and 
raised hopes for political liberalization. In an effort to open up 
the government, Luis Somoza Debayle restored the constitu- 
tional ban on reelection. 

In 1960 Nicaragua joined El Salvador, Guatemala, and Hon- 
duras (Costa Rica joined later) in the establishment of the Cen- 
tral American Common Market (CACM — see Appendix B). 
The main objective of the regional economic group was to pro- 
mote trade among member countries. Under this partnership, 
trade and manufacturing increased, greatly stimulating eco- 
nomic growth. Furthermore, in the international political 
sphere, Luis Somoza Debayle's anticommunist stance won gov- 
ernment favor and support from the United States. In 1959 
Nicaragua was among the first nations to condemn the Cuban 
Revolution and to accuse Fidel Castro Ruz of attempting to 
overthrow the Nicaraguan government. The Luis Somoza 
Debayle government played a leading role in the Bay of Pigs 
invasion of Cuba in 1961, allowing the Cuban exile brigade to 
use military bases on the Caribbean coast to launch the failed 
maneuver. 

Trusted friends of the Somoza family held the presidency 
from 1963 until 1967. In 1963 Rene Schick Gutierrez won the 
presidential election; Somoza Garcia's younger son, Anastasio 
Somoza Debayle, continued as chief director of the National 
Guard. Shick, who gave the appearance of following the less 
repressive programs of Luis Somoza Debayle, died in 1966 and 
was succeeded by Lorenzo Guerrero Gutierrez. 

When poor health prevented Luis Somoza Debayle from 
being a candidate, his brother Anastasio ran in the 1967 presi- 
dential election. To challenge the candidacy of the younger 
Somoza Debayle, the conservatives, the PLI, and the Christian 
Social Party (Partido Social Cristiano — PSC) created the 
National Opposition Union (Union Nacional Opositora — 
UNO). The UNO nominated Fernando Aguero as their candi- 
date. In February 1967, Anastasio Somoza Debayle was elected 
president amidst a repressive campaign against opposition sup- 
porters of Aguero. Two months later, Anastasio's brother Luis 
died of a heart attack. With his election, Anastasio Somoza 
Debayle became president as well as the director of the 
National Guard, giving him absolute political and military con- 



29 



Nicaragua: A Country Study 



trol over Nicaragua. Corruption and the use of force intensi- 
fied, accelerating opposition from populist and business 
groups. 

Although his four-year term was to end in 1971, Somoza 
Debayle amended the constitution to stay in power until 1972. 
Increasing pressures from the opposition and his own party, 
however, led the dictator to negotiate a political agreement, 
known as the Kupia-Kumi Pact, which installed a three-member 
junta that would rule from 1972 until 1974. The junta was 
established in May 1972 amidst opposition led by Pedro 
Joaquin Chamorro Cardenal and his newspaper La Prensa. Pop- 
ular discontent also grew in response to deteriorating social 
conditions. Illiteracy, malnourishment, inadequate health ser- 
vices, and lack of proper housing also ignited criticism from 
the Roman Catholic Church, led by Archbishop Miguel 
Obando y Bravo. The archbishop began to publish a series of 
pastoral letters critical of Somoza Debayle's government. 

On December 23, 1972, a powerful earthquake shook Nica- 
ragua, destroying most of the capital city. The earthquake left 
approximately 10,000 dead and some 50,000 families homeless, 
and destroyed 80 percent of Managua's commercial buildings. 
Immediately after the earthquake, the National Guard joined 
the widespread looting of most of the remaining business 
establishments in Managua. When reconstruction began, the 
government's illegal appropriation and mismanagement of 
international relief aid, directed by the Somoza family and 
members of the National Guard, shocked the international 
community and produced further unrest in Nicaragua. The 
president's ability to take advantage of the people's suffering 
proved enormous. By some estimates, his personal wealth 
soared to US$400 million in 1974. As a result of his greed, 
Somoza Debayle's support base within the business sector 
began to crumble. A revived labor movement increased opposi- 
tion to the regime and to the deteriorating economic condi- 
tions. 

Somoza Debayle's intentions to run for another presidential 
term in 1974 were resisted even within his own PLN. The polit- 
ical opposition, led by Chamorro and former Minister of Edu- 
cation Ramiro Sacasa, established the Democratic Liberation 
Union (Union Democratica de Liberation — Udel), an opposi- 
tion group that included most anti-Somoza elements. The Udel 
was a broad coalition of business groups whose representation 
included members from both the traditional elite and labor 



30 



Nicaragua: A Country Study 

unions. The party promoted a dialogue with the government 
to foster political pluralism. The president responded with 
increasing political repression and further censorship of the 
media and the press. In September 1974, Somoza Debayle was 
reelected president. 

The Rise of the FSLN 

The Sandinista National Liberation Front (Frente Sandi- 
nista de Liberation Nacional — FSLN) was formally organized 
in Nicaragua in 1961. Founded by Jose Carlos Fonseca Amador, 
Silvio Mayorga, and Tomas Borge Martinez, the FSLN began in 
the late 1950s as a group of Marxist, antigovernment student 
activists at the National Autonomous University of Nicaragua 
(Universidad Nacional Autonoma de Nicaragua — UNAN) in 
Managua. Many of the early members were imprisoned. Borge 
spent several years in jail, and Fonseca spent several years in 
exile in Mexico, Cuba, and Costa Rica. Beginning with approx- 
imately twenty members in the early 1960s, the FSLN contin- 
ued to struggle and grow in numbers. By the early 1970s, the 
group had gained enough support from peasants and student 
groups to launch limited military initiatives. 

On December 27, 1974, a group of FSLN guerrillas seized 
the home of a former government official and took as hostages 
a handful of leading Nicaraguan officials, many of whom were 
Somoza relatives. With the mediation of Archbishop Obando y 
Bravo, the government and the guerrillas reached an agree- 
ment on December 30 that humiliated and further debilitated 
the Somoza regime. The guerrillas received a US$1 million 
ransom, had a government declaration read over the radio and 
printed in La Prensa, and succeeded in getting fourteen Sandi- 
nista prisoners released from jail and flown to Cuba along with 
the kidnappers. The guerrilla movement's prestige soared 
because of this successful operation. The act also established 
the FSLN strategy of revolution as an effective alternative to 
Udel's policy of promoting change peacefully. The Somoza 
government responded to the increased opposition with fur- 
ther censorship, intimidation, torture, and murder. 

In 1975 Somoza Debayle and the National Guard launched 
another violent and repressive campaign against the FSLN. 
The government imposed a state of siege, censoring the press, 
and threatening all opponents with detention and torture. The 
National Guard increased its violence against individuals and 
communities suspected of collaborating with the Sandinistas. 



32 



Historical Setting 



In less than a year, it killed many of the FSLN guerrillas, includ- 
ing Fonseca, one of the group's founders. The rampant viola- 
tion of human rights brought national and international 
condemnation of the Somoza regime and added supporters to 
the Sandinista cause. 

In late 1975, the repressive campaign of the National Guard 
and the growth of the group caused the FSLN to split into 
three factions. These three factions — Proletarians, Prolonged 
Popular War, and the Insurrectional Faction, more popularly 
known as the Third Way — insisted on different paths to carry 
out the revolution. The Proletarian faction, headed by Jaime 
Wheelock Roman, followed traditional Marxist thought and 
sought to organize factory workers and people in poor neigh- 
borhoods. The Prolonged War faction, led by Tomas Borge and 
Henry Ruiz after the death of Fonseca, was influenced by the 
philosophy of Mao Zedong and believed that a revolution 
would require a long insurrection that included peasants and 
labor movements. The Third Way faction was more pragmatic 
and called for ideological pluralism. Its members argued that 
social conditions in Nicaragua were ripe for an immediate 
insurrection. Led by Daniel Jose Ortega Saavedra and his 
brother Humberto Ortega Saavedra, the Third Way faction 
supported joint efforts with non-Marxist groups to strengthen 
and accelerate the insurrection movement against Somoza 
Debayle. The FSLN's growing success led the factions to gradu- 
ally coalesce, with the Third Way's political philosophy of plu- 
ralism eventually prevailing. 

The End of the Somoza Debayle Era 

United States support for President Somoza waned after 
1977, when the administration of United States president 
Jimmy Carter made United States military assistance condi- 
tional on improvements in human rights. International pres- 
sure, especially from the Carter administration, forced 
President Somoza to lift the state of siege in September 1977. 
Protests and antigovernment demonstrations resumed, 
although the National Guard continued to keep the upper 
hand over the FSLN guerrillas. 

During October 1977, a group of prominent Nicaraguan 
businesspeople and academics, among them Sergio Ramirez 
Mercado — known as Los Doce (the Group of Twelve) — met in 
Costa Rica and formed an anti-Somoza alliance. Los Doce 
strengthened the FSLN by insisting on Sandinista representa- 



33 



Nicaragua: A Country Study 

tion in any post-Somoza government. Nevertheless, opposition 
to the dictatorship remained divided. Capital flight increased, 
forcing President Somoza to depend on foreign loans, mostly 
from United States banks, to finance the government's deficit. 

The dictatorship's repression of civil liberties and the lack of 
representative institutions slowly led to the consolidation of the 
opposition and armed resistance. The Somoza regime continu- 
ally threatened the press, mostly the newspaper La Prensa and 
the critical editorials of its publisher and Udel leader, Pedro 
Joaquin Chamorro Cardenal. The final act in the downfall of 
the Somoza era began on January 10, 1978, when Chamorro 
was assassinated. Although his assassins were not identified at 
the time, evidence implicated President Somoza's son and 
other members of the National Guard. The opposition held 
the president and his guards responsible for Chamorro's mur- 
der, thus provoking mass demonstrations against the regime. 
The Episcopate of the Nicaraguan Roman Catholic Church 
issued a pastoral letter highly critical of the government, and 
opposition parties called for Somoza Debayle's resignation. On 
January 23, a nationwide strike began, including the public 
and private sectors; supporters of the strike demanded an end 
to the dictatorship. The National Guard responded by further 
increasing repression and using force to contain and intimi- 
date all government opposition. Somoza Debayle, meanwhile, 
asserted his intention to stay in power until the end of his pres- 
idential term in 1981. The general strike paralyzed both private 
industry and government services for ten days. The political 
impasse and the costs to the private sector weakened the strike, 
and in less than two weeks most private enterprises decided to 
suspend their participation. The FSLN guerrillas launched a 
series of attacks throughout the country, but the better- 
equipped National Guard was able to maintain military superi- 
ority. 

Indiscriminate attacks on the civilian population and abuses 
of human rights by National Guard members further tarnished 
the international image of the Somoza government and dam- 
aged the economy. In February 1978, the United States govern- 
ment suspended all military assistance, forcing Somoza to buy 
weapons and equipment on the international market. The Nic- 
araguan economy continued its decline; the country suffered 
from increased capital flight, lack of investment, inflation, and 
unemployment. 



34 



Historical Setting 



Although still fragmented, opposition to the Somoza 
regime continued to grow during 1978. In March, Alfonso 
Robelo Callejas, an anti-Somoza businessman, established the 
Nicaraguan Democratic Movement (Movimiento Democratico 
Nicaraguense — MDN). In May 1978, the traditional Conserva- 
tive Party joined Udel, Los Doce, and the MDN in creating the 
Broad Opposition Front (Frente Amplio de Oposicion — FAO) 
to try to pressure President Somoza into agreeing to a negoti- 
ated solution to the crisis. Although the FSLN was not repre- 
sented in the FAO, the participation of Los Doce in the FAO 
assured a connection between the FSLN and other opposition 
groups. The FSLN responded to the FAO in July by establishing 
a political arm, the United People's Movement (Movimiento 
del Pueblo Unido— MPU). The MPU included leftist labor 
groups, student organizations, and communist and socialist 
parties. The MPU also promoted armed struggle and a nation- 
wide insurrection as the only means of overthrowing the 
Somoza dictatorship. 

The FSLN strengthened its position on August 22, 1978, 
when members of its Third Way faction, led by Eden Pastora 
Gomez (also known as Commander Zero — Comandante 
Cero), took over the National Palace and held almost 2,000 
government officials and members of Congress hostage for two 
days. With mediation from Archbishop Miguel Obando y 
Bravo, as well as from the Costa Rican and Panamanian ambas- 
sadors, the crisis was resolved peacefully. The results of the 
negotiations favored the insurrection and further tarnished 
the government's image. President Somoza had no alternative 
but to meet most of the rebels' demands, including the release 
of sixty FSLN guerrillas from prison, media dissemination of an 
FSLN declaration, a US$500,000 ransom, and safe passage for 
the hostage takers to Panama and Venezuela. The attack elec- 
trified the opposition. The humiliation of the dictatorship also 
affected morale within the National Guard, forcing President 
Somoza to replace many of its officers to forestall a coup and to 
launch a recruitment campaign to strengthen its rank and file. 
Fighting broke out throughout the country, but the National 
Guard, despite internal divisions, kept recapturing most of the 
guerrilla-occupied territories. 

By the end of 1978, the failure of the FAO to obtain a nego- 
tiated solution increased the stature of the insurrection move- 
ment. In October, Los Doce withdrew from the negotiation 
process when the FAO persisted in seeking a negotiated settle- 



35 



Nicaragua: A Country Study 

ment with the dictator, and many FAO members resigned in 
protest over the negotiations with President Somoza. The 
insurrection movement, meanwhile, gathered strength and 
increased the righting. The Somoza regime was further isolated 
and discredited when in November the Organization of Ameri- 
can States (OAS) Inter-American Commission on Human 
Rights published a report charging the National Guard with 
numerous violations of human rights. The report was followed 
by a United Nations (UN) resolution condemning the Nicara- 
guan government. In December 1978, the FSLN was further 
strengthened when Cuban mediation led to an agreement 
among the three FSLN factions for a united Sandinista front. 
Formal reunification of the FSLN occurred in March 1979. 

The Sandinista Revolution 

A mediation process led by the OAS collapsed during Janu- 
ary 1979, when President Somoza refused to hold a national 
plebiscite and insisted on staying in power until 1981. As fight- 
ing increased, the Nicaraguan economy faced a severe eco- 
nomic crisis, with a sharp decline in agricultural and industrial 
production, as well as high levels of unemployment, inflation, 
defense spending, and capital flight. The government debt also 
increased mostly as a result of defense expenditures and the 
gradual suspension of economic support from all international 
financial institutions. 

On February 1, 1979, the Sandinistas established the Nation- 
al Patriotic Front (Frente Patriotico Nacional — FPN), which 
included Los Doce, the PLI, and the Popular Social Christian 
Party (Partido Popular Social Cristiano— PPSC). The FPN had 
broad appeal, including political support from elements of the 
FAO and the private sector. After the formal unification of the 
Sandinista guerrillas in March, heavy fighting broke out all 
over the country. By then the FSLN was better equipped, with 
weapons flowing from Venezuela, Panama, and Cuba, mostly 
through Costa Rica. The FSLN launched its final offensive dur- 
ing May, just as the National Guard began to lose control of 
many areas of the country. In a year's time, bold military and 
political moves had changed the FSLN from one of many oppo- 
sition groups to a leader in the anti-Somoza revolt. 

On June 18, a provisional Nicaraguan government in exile, 
consisting of a five-member junta, was organized in Costa Rica. 
Known as the Puntarenas Pact, an agreement reached by the 
new government in exile called for the establishment of a 



36 



"Revolutionary Art, " murals painted on buildings and walls in 

Nicaragua in the 1980s 
Courtesy Nina Serafino 



37 



Nicaragua: A Country Study 

mixed economy, political pluralism, and a nonaligned foreign 
policy. Free elections were to be held at a later date, and the 
National Guard was to be replaced by a nonpartisan army. The 
members of the new junta were Daniel Jose Ortega Saavedra of 
the FSLN, Moises Hassan Morales of the FPN, Sergio Ramirez 
Mercado of Los Doce, Alfonso Robelo Callejas of the MDN, 
and Violeta Barrios de Chamorro, the widow of La Prensds edi- 
tor. Panama was the first country to recognize the junta. By the 
end of June, most of Nicaragua was under FSLN control, with 
the exception of the capital. President Somoza's political and 
military isolation finally forced him to consider resignation. 
The provisional government in exile released a government 
program on July 9 in which it pledged to organize an effective 
democratic regime, promote political pluralism and universal 
suffrage, and ban ideological discrimination — except for those 
promoting the "return of Somoza's rule." By the second week 
of July, President Somoza had agreed to resign and hand over 
power to Francisco Maliano Urcuyo, who would in turn trans- 
fer the government to the Revolutionary Junta. According to 
the agreement, a cease-fire would follow, and defense responsi- 
bilities would be shared by elements of the National Guard and 
the FSLN. 

On July 17, 1979, Somoza Debayle resigned, handed over 
power to Urcuyo, and fled to Miami. The former Nicaraguan 
dictator then established residence in Paraguay, where he lived 
until September 1980, when he was murdered, reportedly by 
leftist Argentine guerrillas. After President Somoza left Nicara- 
gua in 1979, many members of the National Guard also fled 
the country, seeking asylum in neighboring countries, particu- 
larly in Honduras and Guatemala. Others turned themselves in 
to the new authorities after the FSLN took power, on promises 
of amnesty. They were subsequently tried and many served jail 
terms. The five-member junta arrived in the city of Leon on 
July 18, a day after Somoza's departure from the capital. 
Urcuyo tried to ignore the agreement transferring power, but 
in less than two days, domestic and international pressure 
drove him to exile in Guatemala. On July 19, the FSLN army 
entered Managua, ending the Nicaraguan revolution. The 
five-member junta entered the Nicaraguan capital the next day 
and assumed power, reiterating its pledge to work for political 
pluralism, a mixed economic system, and a nonaligned foreign 
policy. 



38 



Historical Setting 



The Sandinista Years, 1979-90 

Consolidation of the Revolution, 1979-80 

The new government inherited a country in ruins, with a 
stagnant economy and a debt of about US$1.6 billion. Ah esti- 
mated 50,000 Nicaraguans were dead, 120,000 were exiles in 
neighboring countries, and 600,000 were homeless. Food and 
fuel supplies were exhausted, and international relief organiza- 
tions were trying to deal with disease caused by lack of health 
supplies. Yet the attitude of the vast majority of Nicaraguans 
toward the revolution was decidedly hopeful. Most Nicara- 
guans saw the Sandinista victory as an opportunity to create a 
system free of the political, social, and economic inequalities of 
the almost universally hated Somoza regime. 

One of the immediate goals of the new government was 
reconstruction of the national economy. The junta appointed 
individuals from the private sector to head the government's 
economic team. They were responsible for renegotiating the 
foreign debt and channeling foreign economic aid through 
the state-owned International Reconstruction Fund (Fondo 
Internacional de Reconstruccion — FIR) . The new government 
received bilateral and multinational financial assistance and 
also rescheduled the national foreign debt on advantageous 
terms. Pledging food for the poor, the junta made restructur- 
ing the economy its highest priority. 

At first the economy experienced positive growth, largely 
because of renewed inflow of foreign aid and reconstruction 
after the war (see The Sandinista Era, ch. 3). The new govern- 
ment enacted the Agrarian Reform Law, beginning with the 
nationalization of all rural properties owned by the Somoza 
family or people associated with the Somozas, a total of 2,000 
farms representing more than 20 percent of Nicaragua's culti- 
vable land. These farms became state property under the new 
Ministry of Agrarian Reform. Large agroexport farms not 
owned by the Somozas generally were not affected by the agrar- 
ian reform. Financial institutions, all in bankruptcy from the 
massive capital flight during the war, were also nationalized. 

The second goal of the Sandinistas was a change in the old 
government's pattern of repression and brutality toward the 
general populace. Many of the Sandinista leaders were victims 
of torture themselves, and the new minister of interior, Tomas 
Borge Martinez, tried to keep human rights violations low. 
Most prisoners accused of injustices under the Somoza regime 



39 



Nicaragua: A Country Study 

were given a trial, and the Ministry of Interior forbade cruelty 
to prisoners. In their first two years in power, Amnesty Interna- 
tional and other human rights groups found the human rights 
situation in Nicaragua greatly improved (see Human Rights, 
ch. 5). 

The third major goal of the country's new leaders was the 
establishment of new political institutions to consolidate the 
revolution. On August 22, 1979, the junta proclaimed the Fun- 
damental Statute of the Republic of Nicaragua. This statute 
abolished the constitution, presidency, Congress, and all 
courts. The junta ruled by unappealable decree under emer- 
gency powers. National government policy, however, was gener- 
ally made by the nine-member Joint National Directorate 
(Direction National Conjunto — DNC), the ruling body of the 
FSLN, and then transmitted to the junta by Daniel Ortega for 
the junta's discussion and approval. 

The new government established a nonelected corporatist 
legislature, the Council of State, on May 4, 1980. The council 
could approve laws submitted to it by the junta or initiate its 
own legislation. The junta, however, had the right of veto over 
council-initiated legislation, and the junta retained control 
over much of the budget. Although its powers were limited, the 
council was not a rubber stamp and often amended legislation 
given it by the junta. The establishment of the Council of State 
and the political makeup of its thirty-three members had been 
decided in negotiations among the revolutionary groups in 
1979. The members were not elected but appointed by various 
political groups. In the discussions establishing the council, it 
was agreed that the FSLN could name twelve of the thirty-three 
members. Soon after its formation, however, the junta added 
fourteen new members to the Council of State, with twelve of 
those going to the FSLN. This new configuration gave the 
FSLN twenty-four of the forty-seven seats, enough to bloc any 
opposition initiative. Opponents of the FSLN viewed the addi- 
tion of the new members as a power grab, but the FSLN 
responded that new groups had been formed since the revolu- 
tion and that they needed to be represented. 

The membership of the junta changed during its early 
years. Chamorro resigned in early 1980, ostensibly for health 
reasons, but later asserted that she had become dissatisfied 
with increased FSLN dominance in the government. Robelo 
resigned in mid-1980 to protest the expansion of the Council 
of State. Chamorro and Robelo were replaced by a rancher 



40 



Historical Setting 



who belonged to the PDC and a banker, one of the members of 
Los Doce. In 1983 the junta was reduced to three members, 
with Daniel Ortega clearly playing the lead role among the 
remaining three. 

Immediately after the revolution, the Sandinistas had the 
best organized and most experienced military force in the 
country. To replace the National Guard, the Sandinistas estab- 
lished a new national army, the Sandinista People's Army (Ejer- 
cito Popular Sandinista — EPS), and a police force, the 
Sandinista Police (Policia Sandinista— PS; see The Sandinista 
People's Army, 1979-90; and Police and Law Enforcement, ch. 
5). These two groups, contrary to the original Puntarenas Pact, 
were controlled by the Sandinistas and trained by personnel 
from Cuba, Eastern Europe, and the Soviet Union. Opposition 
to the overwhelming FSLN influence in the security forces did 
not surface until 1980. Meanwhile, the EPS developed, with 
support from Cuba and the Soviet Union, into the largest and 
best-equipped military force in Central America. Compulsory 
military service, introduced during 1983, brought the EPS 
forces to about 80,000 by the mid-1980s. 

Immediately after the revolution, the FSLN also developed 
mass organizations representing most popular interest groups 
in Nicaragua. The most significant of these included the Sandi- 
nista Workers' Federation (Central Sandinista de Trabaja- 
dores — CST) representing labor unions, the Luisa Amanda 
Espinoza Nicaraguan Women's Association (Asociacion de 
Mujeres Nicaraguenses Luisa Amanda Espinoza — AMNLAE), 
and in 1982 the National Union of Farmers and Cattlemen 
(Union Nacional de Agricultores y Ganaderos — UNAG) com- 
posed of small farmers and peasants. The FSLN also created 
neighborhood surveillance organizations, similar to the Cuban 
Committees for the Defense of the Revolution, called Sandi- 
nista Defense Committees (Comites de Defensa Sandinista — 
CDSs) . The opponents of the Sandinistas made little attempt to 
develop effective mass organizations that could challenge the 
well organized and well disciplined Sandinista groups. Thus, 
the FSLN mass organizations were instrumental in consolidat- 
ing Sandinista power over political and military institutions. By 
1980 Sandinista organizations embraced some 250,000 Nicara- 
guans. Less than a year after their victory, the Sandinistas con- 
trolled the government. 



41 



Nicaragua: A Country Study 



Growth of Opposition, 1981-83 

Domestic support for the new Sandinista government was 
not universal, however. The indigenous people of the Carib- 
bean coast, mostly Miskito, had been neglected by national gov- 
ernments since colonial times and rejected Sandinista efforts 
to merge them into the national mainstream. Government 
forces responded by forcibly relocating many of the Miskito. 
International human rights organizations and government crit- 
ics charged that the forced relocations involved large-scale sys- 
tematic violations of human rights by the government. Many 
Miskito and other indigenous people subsequently joined 
groups opposing the government. 

From late 1979 through 1980, the Carter administration 
made efforts to work with FSLN policies. Relations began to 
cool, however, during the last months of the Carter administra- 
tion, and when President Ronald Reagan took office in January 
1981, the United States government launched a campaign to 
isolate the Sandinista government. Claiming that Nicaragua, 
with assistance from Cuba and the Soviet Union, was supplying 
arms to the guerrillas in El Salvador, the Reagan administration 
suspended all United States aid to Nicaragua on January 23, 
1981. The Nicaraguan government denied all United States 
allegations and charged the United States with leading an 
international campaign against it. Later that year, the Reagan 
administration authorized support for groups trying to over- 
throw the Sandinistas. 

Using an initial budget of US$19 million and camps in 
southern Honduras as a staging area, the United States sup- 
ported groups of disgruntled former members of the National 
Guard. These groups became known as the Contras (short for 
contrarevolucionarios — see Glossary). The Contras initially con- 
sisted of former members of the National Guard who had fled 
to Honduras after the fall of President Somoza. By the end of 
1981, however, the group's membership had multiplied 
because peasants from the north and ethnic groups from the 
Caribbean coast had joined in the counterrevolutionary war. 
Nevertheless, early Contra leadership was represented mostly 
by former members of the National Guard; this fact made the 
movement highly unpopular among most Nicaraguans. 

The Contras established operational bases in Honduras 
from which they launched hit-and-run raids throughout north- 
ern Nicaragua. The charismatic Eden Pastora abandoned the 
Sandinista revolution in July 1981 and formed his own guerrilla 



42 



Historical Setting 



group, which operated in the southern part of Nicaragua from 
bases in Costa Rica (see fig. 3). Collectively known as the Nica- 
raguan Resistance, the three main Contra groups were the 
United Nicaraguan Opposition, which operated in the north; 
the Opposition Block of the South, which operated in the 
southeast; and the Nicaraguan Coast Indian Unity, which oper- 
ated in the northeast. Although the Sandinista army was larger 
and better equipped than the Contras, the antigovernment 
campaign became a serious threat to the FSLN government, 
largely through damage to the economy (see The Nicaraguan 
Resistance, ch. 5). 

As the Contra war intensified, the Sandinistas' tolerance of 
political pluralism waned. The Sandinistas imposed emergency 
laws to ban criticism and organization of political opposition. 
Most social programs suffered as a result of the war because the 
Sandinista regime was forced to increase military spending 
until half of its budget went for defense (see Social Conditions, 
ch. 2). Agricultural production also declined sharply as refu- 
gees fled areas of conflict. 

The bishops of the Roman Catholic Church, although sup- 
portive of the anti-Somoza movement during the late 1970s, 
later opposed the Sandinista regime in the 1980s. The church's 
hierarchy was hurt during the first years of the revolution by 
the active role of its radical branch, known as the Popular 
Church of Liberation Theology, whose philosophy was heavily 
influenced by liberation theology (see Glossary), as well as by 
radical priests in the Sandinista government. Ernesto Cardenal 
Martinez, a Jesuit priest who had joined the Sandinista Revolu- 
tion, became the minister of culture for the FSLN government. 
Father Miguel D'Escoto Brockman (also known as Jeronimo) 
was appointed minister of foreign relations, and Father 
Edgardo Parrales Castillo was named minister of social welfare. 
However, Cardinal Miguel Obando y Bravo (the former arch- 
bishop of Managua) soon became as critical of the FSLN as he 
had been of the Somoza dictatorship. The cardinal's opposi- 
tion brought internal divisions within the Roman Catholic 
Church, with one side, the hierarchy, rejecting the Marxist phi- 
losophy of the Sandinista leadership, and the other, the Popu- 
lar Church, participating in the "civic struggle of the people." 
The bishops distrusted the Sandinista revolutionary ideology 
and its base of support. The Popular Church, however, wanted 
to play a part in the revolutionary programs of the FSLN gov- 
ernment. 



43 



Nicaragua: A Country Study 




Source: Based on information from Mike Edwards, "Nicaragua, Nation in Conflict," 

National Geographic, 168, No. 6, 1985, 786. 

Figure 3. Areas of Insurgency, 1985 

Conflict within the Roman Catholic Church broke into the 
open when Pope John Paul II visited Nicaragua in March 1983. 
Discussions over details of the pontiffs visit had been tense, but 
in the end the government provided free transportation for an 
estimated half million Nicaraguans to witness the highlight of 
the visit, an outdoor mass in Managua. At the mass, the Pope 
refused to offer a prayer for the souls of deceased soldiers, and 
antigovernment demonstrators began chanting, "We love the 
Pope." Their calls were soon drowned out by progovernment 
members of the crowd chanting, "We want peace." The entire 
mass was disrupted, and the pope angrily asked the crowd for 
silence several times. The entire spectacle was broadcast to the 



44 



Historical Setting 



world and was portrayed as a deliberate attempt by the Sandini- 
stas to disrupt the mass. The event proved to be a tremendous 
public relations debacle for the Sandinistas and a coup for the 
Nicaraguan church hierarchy 

By 1981 one of the country's most influential papers, La 
Prensa, had joined the growing chorus of dissent against the 
Sandinista government. Under the state of emergency 
declared in 1982, the paper was subject to prior censorship. 
Despite several instances of suspended publication, some man- 
dated by the Ministry of Interior and some in protest by the 
paper's editor over cut copy, the paper continued to operate. 
In anticipation of upcoming elections, the government eased 
censorship in 1983. Increased latitude in what it could publish 
only increased La Prensa's bitter criticism of the government. 

Institutionalization of the Revolution, 1984 

Discussion over the date and procedures for the first 
national postrevolutionary election began almost immediately 
after the revolution. The Fundamental Statue of the Republic 
of Nicaragua gave the junta the authority to call for elections 
"whenever the conditions of national reconstruction might 
permit." In 1983 the Council of State passed an amended Polit- 
ical Parties Law that, among other things, defined a political 
party as a group "vying for power" (the original version pro- 
posed by the FSLN defined a political party as a group already 
"participating in public administration"). Amendments to the 
law also promised all parties full access to the media. 

In mid-1984, the Electoral Law was passed setting the date 
and conditions for the election. As was the case with the Politi- 
cal Parties Law, much debate went into the law's drafting. The 
opposition parties favored the election of a two-year interim 
president and a six-year legislature that would draft a new con- 
stitution. The junta, citing foreign pressure to hold elections 
early and the added cost of two elections in two years, prevailed 
with its proposal to simultaneously elect the president and 
members of the new legislature for six-year terms. The opposi- 
tion preferred a 1985 date for elections in order to give it time 
to prepare its campaign, but the FSLN set the elections for 
November 4, 1984, and the inauguration for January 10, 1985. 
The law set the voting age at sixteen, which the opposition 
complained was an attempt to capitalize on the FSLN's popu- 
larity with the young. The number of National Assembly seats 
would vary with each election — ninety seats to be apportioned 



45 



Nicaragua: A Country Study 

among each party according to its share of the vote and an 
additional seat for each losing presidential candidate. The 
entire electoral process would be the responsibility of a new 
fourth branch of government, the Supreme Electoral Council. 
Parties that failed to participate in the election would lose their 
legal status. 

By July 1984, eight parties or coalitions had announced 
their intention to field candidates: the FSLN with Daniel 
Ortega as presidential candidate; the Democratic Coordinator 
(Coordinadora Democratica — CD), a broad coalition of labor 
unions, business groups, and four centrist parties; and six other 
parties — the PLI, the PPSC, the Democratic Conservative Party 
(Partido Conservador Democratico — PCD), the communists, 
the socialists, and the Marxist-Leninist Popular Action Move- 
ment. Claiming that the Sandinistas were manipulating the 
electoral process, the CD refused to formally file its candidates 
and urged Nicaraguans to boycott the election. In October, Vir- 
gilio Godoy Reyes of the PLI also withdrew his candidacy, 
although most of the other candidates for the National Assem- 
bly and the PLI's vice presidential candidate remained on the 
ballot. Other parties reportedly also were pressured to with- 
draw from the election. 

On November 4, 1984, about 75 percent of the registered 
voters went to the polls. The FSLN won 67 percent of the votes, 
the presidency, and sixty-one of the ninety-six seats in the new 
National Assembly. The three conservative parties that 
remained in the election garnered twenty-nine seats in the 
National Assembly; the three parties on the left won a total of 
six seats. Foreign observers generally reported that the election 
was fair. Opposition groups, however, said that FSLN domina- 
tion of government organs, mass organizations, and much of 
the media created a climate of intimidation that precluded a 
truly open election. Inauguration day was January 10, 1985; the 
date was selected because it was the seventh anniversary of the 
assassination of newspaper editor Chamorro. Attending 
Ortega's swearing in as president were the presidents of Yugo- 
slavia and Cuba, the vice presidents of Argentina and the Soviet 
Union, and four foreign ministers from Latin America. 

The Regional Peace Effort and Retrenchment of the Revolu- 
tion, 1986-90 

Daniel Ortega began his six-year presidential term on Janu- 
ary 10, 1985. After the United States Congress had turned 



46 



Historical Setting 



down continued funding of the Contras in April 1985, the 
Reagan administration ordered a total embargo on United 
States trade with Nicaragua the following month, accusing the 
Sandinista regime of threatening United States security in the 
region. The FSLN government responded by suspending civil 
liberties. Both the media and the Roman Catholic bishops were 
accused of destabilizing the political system. The church's 
press, as well as the conservative newspaper La Prensa, were 
censored or closed at various periods because of their critical 
views on the military draft and the government's handling of 
the civil war. In June 1986, the United States Congress voted to 
resume aid to the Contras by appropriating US$100 million in 
military and nonmilitary assistance. The Sandinista govern- 
ment was forced to divert more and more of its economic 
resources from economic development to defense against the 
Contras. 

Debate in the United States over military aid for the Contras 
continued until November 1986, when the policy of the 
Reagan staff toward Nicaragua was shaken by the discovery of 
an illegal operation in which funds from weapons sold to Iran 
during 1985 were diverted to the Contras. The Iran-Contra 
scandal resulted from covert efforts within the Reagan staff to 
support the Contras in spite of a 1985 United States Congres- 
sional ban on military aid. In the aftermath of the Iran-Contra 
affair, the United States Congress again stopped all military 
support to the Contras in 1987 except for what was called "non- 
lethal" aid. The result of the cutoff was a military stalemate; the 
Contras were unable or unwilling to keep on fighting without 
full United States support, and the Sandinista government 
could not afford to continue waging an unpopular war that 
had already devastated the economy. The conditions for a 
negotiated solution to the conflict were better than ever, leav- 
ing both parties, the Contras and the Sandinistas, with few 
options other than to negotiate. 

After Oscar Arias Sanchez was elected to the presidency of 
Costa Rica in 1986, he designed a regional plan to bring peace 
to Central America, following earlier efforts by the Contadora 
(see Glossary) Group (formed by Mexico, Venezuela, Panama, 
and Colombia in 1983). The Arias Plan, officially launched in 
February 1987, was signed by the presidents of five Central 
American republics (Guatemala, Honduras, El Salvador, Nica- 
ragua, and Costa Rica) at a presidential summit held in Esqui- 
pulas, Guatemala, in August 1987. This agreement, also known 



47 



Nicaragua: A Country Study 

as Esquipulas II, called for amnesty for persons charged with 
political crimes, a negotiated cease-fire, national reconciliation 
for those countries with insurgencies (Guatemala, El Salvador, 
and Nicaragua), an end to all external aid to insurgencies 
(United States support to the Contras and Soviet and Cuban 
support to guerrillas in Guatemala and El Salvador), and dem- 
ocratic reforms leading to free elections in Nicaragua. After 
the signing of Esquipulas II, the government created a 
National Reconciliation Commission headed by Cardinal 
Miguel Obando y Bravo. The United States government 
responded by encouraging the Contras to negotiate. At the 
time, there were an estimated 10,000 Contra rebels and as 
many as 40,000 of their dependents living in Honduras. 

An additional step toward the solution of the Nicaraguan 
conflict was taken at a summit of Central American presidents 
held on January 15, 1988, when President Daniel Ortega 
agreed to hold direct talks with the Contras, to lift the state of 
emergency, and to call for national elections. In March the 
FSLN government met with representatives of the Contras and 
signed a cease-fire agreement. The Sandinistas granted a gen- 
eral amnesty to all Contra members and freed former members 
of the National Guard who were still imprisoned. 

By mid-1988, international institutions had demanded that 
the Sandinistas launch a drastic economic adjustment program 
as a condition for resumption of aid. This new economic pro- 
gram imposed further hardship on the Nicaraguan people. 
Government agencies were reorganized, leaving many Nicara- 
guans unemployed. The Sandinista army also went through a 
reduction in force. To complicate matters, in October 1988 the 
country was hit by Hurricane Joan, which left 432 people dead, 
230,000 homeless, and damages estimated at US$1 billion. In 
addition, a severe drought during 1989 ruined agricultural pro- 
duction for 1990. 

With the country bankrupt and the loss of economic sup- 
port from the economically strapped Soviet Union, the Sandi- 
nistas decided to move up the date for general elections in 
order to convince the United States Congress to end all aid to 
the Contras and to attract potential economic support from 
Europe and the United States. As a result of Esquipulas II, the 
Sandinista regime and the Contras successfully concluded 
direct negotiations on a cease-fire in meetings held at Sapoa, 
Nicaragua, during June 1988. In February 1989, the five Cen- 
tral American presidents met once again in Costa del Sol, El 



48 



Historical Setting 



Salvador, and agreed on a plan to support the disarming and 
dissolving of Contra forces in Honduras, as well as their volun- 
tary repatriation into Nicaragua. President Ortega also agreed 
to move the next national elections, scheduled for the fall of 
1990, up to February 1990; to guarantee fair participation for 
opposition parties; and to allow international observers to 
monitor the entire electoral process. 

The UNO Electoral Victory 

As a result of the Esquipulas II peace accords, the FSLN gov- 
ernment reinstated political freedoms. At first, the various 
anti-Sandinista groups were weak and divided and did not have 
a cohesive government program to challenge the FSLN. The 
Sandinistas, therefore, felt confident of their success at the 
polls despite deteriorating socioeconomic conditions in the 
country. On June 6, 1989, fourteen parties, united only in their 
opposition to the Sandinistas, formed a coalition called the 
National Opposition Union (Union Nacional Opositora — 
UNO), whose support was drawn from a broad base, including 
conservative and liberal parties as well as two of Nicaragua's tra- 
ditional communist factions. Despite its determination to vote 
the Sandinistas out of power, however, the UNO coalition 
remained a weak opposition lacking a cohesive program. 

The UNO and the Sandinistas began their political cam- 
paigns in the summer of 1989. Although sharp divisions within 
the UNO remained, all fourteen parties finally compromised, 
and on September 2 the anti-Sandinista coalition nominated 
Violeta Barrios de Chamorro, publisher of La Prensa and 
former member of the junta, as its candidate for president. Vir- 
gilio Godoy Reyes, head of the PLI and former minister of 
labor under the Sandinistas, was chosen as her running mate. 
The FSLN nominated Daniel Ortega for the presidency and 
Sergio Ramirez Mercado as his running mate. 

The political campaign was conducted under the close 
international supervision of the OAS, the UN, and a delegation 
headed by former United States president Jimmy Carter. The 
administration of United States president George H.W. Bush 
provided economic assistance to the Sandinista opposition. 
Despite some violent incidents, the electoral campaign was car- 
ried out in relative peace. The FSLN was better organized than 
the opposition and used government funds and resources — 
such as school buses and military trucks — to bring Sandinista 
supporters from all over the country to their rallies. In an 



49 



Nicaragua: A Country Study 

effort to divert attention from the critical economic situation, 
the Sandinista campaign appealed to nationalism, depicting 
UNO followers as pro-Somoza instruments of United States for- 
eign policy and enemies of the Nicaraguan revolution. Despite 
limited resources and poor organization, the UNO coalition 
under Violeta Chamorro directed a campaign centered around 
the failing economy and promises of peace. Many Nicaraguans 
expected the country's economic crisis to deepen and the Con- 
tra conflict to continue if the Sandinistas remained in power. 
Chamorro promised to end the unpopular military draft, bring 
about democratic reconciliation, and promote economic 
growth. In the February 25, 1990, elections, Violeta Barrios de 
Chamorro carried 55 percent of the popular vote against 
Daniel Ortega's 41 percent. Exhausted by war and poverty, the 
Nicaraguan people had opted for change. 

Although the election results surprised many observers, 
both sides began conversations to bring about a peaceful trans- 
fer of power. In March a transition team headed by Chamorro's 
son-in-law, Antonio Lacayo Oyanguren, representing the UNO, 
and General Humberto Ortega, representing the FSLN, began 
discussions on the transfer of political power. During the two- 
month lame-duck period, Sandinista bureaucrats systematically 
ransacked government offices and gave government assets to 
loyal government supporters, destroyed records, consolidated 
many of the government agencies (in particular, the Ministry 
of Interior, whose security forces were incorporated into the 
EPS), and passed legislation to protect their interests once they 
were ousted from the government. On May 30, the Sandinista 
government, along with the UNO transition team and the Con- 
tra leadership, signed agreements for a formal cease-fire and 
the demobilization of the Contras. Despite continued sporadic 
clashes, the Contras completed their demobilization on June 
26, 1990 (see The Chamorro Government Takes Power, ch. 4). 

The FSLN accepted its new role of opposition and handed 
over political power to Chamorro and the UNO coalition on 
April 25, 1990. President Chamorro pledged her determina- 
tion to give Nicaragua a democratic government, bring about 
national reconciliation, and keep a small nonpartisan profes- 
sional army. Nicaragua underwent yet another sea change as 
the country stepped out of the Cold War spotlight. 

* * * 



50 



Historical Setting 



Although the study of Nicaragua dramatically increased 
among scholars all over the world after the 1979 revolution, a 
comprehensive history of Nicaragua in English is still not avail- 
able. The most current references on the subject are part of 
large volumes on Latin American and Central American his- 
tory, all of which include chapters on Nicaragua. The best vol- 
umes currently available are James Dunkerley's Power in the 
Isthmus: Political History of Modern Central America and Central 
America: A Nation Divided, written by Ralph Lee Woodward Jr. 
There are, however, many books treating specific periods of 
Nicaraguan history. Information on Nicaragua's colonial his- 
tory can be found in Benjamin Keen's A History of Latin America 
as well as in Thomas E. Skidmore and Peter H. Smith's chapter 
on "Central America: Colonialism, Dictatorship, and Revolu- 
tion," in their Modern Latin America. The six decades of transi- 
tion from colonial status to incipient nation-state are brilliantly 
covered by E. Bradford Burns in Patriarch and Folk: The Emer- 
gence of Nicaragua 1798-1858. A detailed account of British and 
United States interventions is presented by Neill Macaulay in 
The Sandino Affair. The first half of the twentieth century, 
including the rise and fall of the Somoza dynasty, is covered in 
Politics in Central America by Thomas P. Anderson. Somoza and the 
Legacy of U.S. Involvement in Central America by Bernard Dieder- 
ich is a comprehensive look at the Somoza era, and Karl Ber- 
mann's Under the Big Stick: Nicaragua and the United States since 
1848 covers United States-Nicaragua relations. 

Many works cover the history of the Sandinista period. The 
most comprehensive analysis of the first half of the Sandinista 
regime is Nicaragua: The First Five Years, edited by Thomas W. 
Walker. An excellent source for information on the FSLN lead- 
ers, as well as the inner workings of the FSLN as a political 
party, is Dennis L. Gilbert's Sandinistas: The Party and the Revolu- 
tion. Reed Brody's Contra Terror in Nicaragua presents the testi- 
mony of victims of Contra attacks. Banana Diplomacy: The 
Making of American Policy in Nicaragua, 1981-1987 by Roy Gut- 
man provides a full account of United States foreign policy 
toward Nicaragua during the Reagan administration. (For fur- 
ther information and complete citations, see Bibliography.) 



51 



Chapter 2. The Society and Its Environment 




Roman Catholic Church in Managua 



DEDICATED REVOLUTIONARIES, the Sandinistas (see Glos- 
sary) came to power in 1979 determined to transform Nicara- 
guan society. How well they succeeded in their goal was still 
being debated in 1993. During their years in power, the Sandi- 
nistas nationalized the country's largest fortunes, redistributed 
much of the rural land, revamped the national education and 
health care systems to better serve the poor majority, rewrote 
the laws pertaining to family life, and challenged the ideologi- 
cal authority of the Roman Catholic bishops. But although the 
Sandinistas were confronting a society that was subject to pow- 
erful forces of secular change, this society also had deeply 
ingrained characteristics. Before and after the Sandinista 
decade, Nicaraguan society was shaped by the strength of fam- 
ily ties and the relative weakness of other institutions; by rapid 
population growth and rising urbanization; by male domi- 
nance, high fertility rates, and large numbers of female-headed 
households; by the predominance of nominal Roman Catholi- 
cism existing alongside the dynamism of evangelical Protestant- 
ism; by steep urban-rural and class inequalities; and by 
sweeping cultural differences between the Hispanic-mestizo 
west and the multiethnic society of the Caribbean lowlands. 

In 1993 the permanence of the changes made by the Sandi- 
nistas was unclear. The relevant social scientific literature was 
slim, and many basic statistics were unavailable. Furthermore, 
the forces set in motion by the Sandinista revolution might 
take decades to play themselves out. 

Climate and Terrain 

Natural Regions 

Nicaragua, approximately the size of New York state, is the 
largest country in Central America (see Glossary) . The country 
covers a total area of 129,494 square kilometers (120,254 
square kilometers of which are land area) and contains a diver- 
sity of climates and terrains. The country's physical geography 
divides it into three major zones: the Pacific lowlands, the cen- 
tral highlands, and the Caribbean lowlands (see fig. 4). 

The Pacific lowlands extend about seventy-five kilometers 
inland from the Pacific coast. Most of the area is flat, except for 
a line of young volcanoes, many of which are still active, run- 



55 



Nicaragua: A Country Study 

ning between the Golfo de Fonseca and the western shore of 
Lago de Nicaragua. These peaks lie just west of a large crustal 
fracture or structural rift that forms a long, narrow depression 
passing southeast across the isthmus from the Golfo de Fonseca 
to the Rio San Juan. The rift is occupied in part by the largest 
freshwater lakes in Central America: Lago de Managua (fifty-six 
kilometers long and twenty-four kilometers wide) and Lago de 
Nicaragua (about 160 kilometers long and seventy-five kilome- 
ters wide). These two lakes are joined by the Rio Tipitapa, 
which flows south into Lago de Nicaragua. Lago de Nicaragua 
drains into the Rio San Juan (the boundary between Nicaragua 
and Costa Rica), which flows through the southern part of the 
rift lowlands to the Caribbean Sea. The valley of the Rio San 
Juan forms a natural passageway close to sea level across the 
Nicaraguan isthmus from the Caribbean Sea to Lago de Nicara- 
gua and the rift. From the southwest edge of Lago de Nicara- 
gua, it is only nineteen kilometers to the Pacific Ocean. This 
route was considered as a possible alternative to the Panama 
Canal at various times in the past. 

Surrounding the lakes and extending northwest of them 
along the rift valley to the Golfo de Fonseca are fertile lowland 
plains highly enriched with volcanic ash from nearby volca- 
noes. These lowlands are densely populated and well culti- 
vated. More directly west of the lake region is a narrow line of 
ash-covered hills and volcanoes that separate the lakes from the 
Pacific Ocean. This line is highest in the central portion near 
Leon and Managua. 

Because western Nicaragua is located where two major tec- 
tonic plates collide, it is subject to earthquakes and volcanic 
eruptions. Although periodic volcanic eruptions have caused 
agricultural damage from fumes and ash, earthquakes have 
been by far more destructive to life and property. Hundreds of 
shocks occur each year, some of which cause severe damage. 
The capital city of Managua was virtually destroyed in 1931 and 
again in 1972. 

The triangular area known as the central highlands lies 
northeast and east of the Pacific lowlands. This rugged moun- 
tain terrain is composed of ridges 900 to 1,800 meters high and 
a mixed forest of oak and pine alternating with deep valleys 
that drain primarily toward the Caribbean. Very few significant 
streams flow west to the Pacific Ocean; those that do are steep, 
short, and flow only intermittently. The relatively dry western 
slopes of the central highlands, protected by the ridges of the 



56 



n 



The Society and Its Environment 



highlands from the moist winds of the Caribbean, have drawn 
farmers from the Pacific region since colonial times and are 
now well settled. The eastern slopes of the highlands are cov- 
ered with rain forests and are lightly populated with pioneer 
agriculturalists and small communities of indigenous people. 

The eastern Caribbean lowlands of Nicaragua form the 
extensive (occupying more than 50 percent of national terri- 
tory) and still sparsely settled lowland area known as Costa de 
Mosquitos. The Caribbean lowlands are sometimes considered 
synonymous with the former department of Zelaya, which is 
now divided into the North Atlantic Autonomous Region 
(Region Autonomista Atlantico Norte) and the South Atlantic 
Autonomous Region (Region Autonomista Atlantico Sur) and 
constitutes about 45 percent of Nicaragua's territory. These 
lowlands are a hot, humid area that includes coastal plains, the 
eastern spurs of the central highlands, and the lower portion of 
the Rio San Juan basin. The soil is generally leached and infer- 
tile. Pine and palm savannas predominate as far south as the 
Laguna de Perlas. Tropical rain forests are characteristic from 
the Laguna de Perlas to the Rio San Juan, in the interior west 
of the savannas, and along rivers through the savannas. Fertile 
soils are found only along the natural levees arid narrow flood- 
plains of the numerous rivers, including the Escondido, the 
Rio Grande de Matagalpa, the Prinzapolka, and the Coco, and 
along the many lesser streams that rise in the central highlands 
and cross the region en route to the complex of shallow bays, 
lagoons, and salt marshes of the Caribbean coast. 

Climate 

Temperature varies little with the seasons in Nicaragua and 
is largely a function of elevation. The tierra caliente, or the "hot 
land," is characteristic of the foothills and lowlands from sea 
level to about 750 meters of elevation. Here, daytime tempera- 
tures average 30°C to 33°C, and night temperatures drop to 
21 °C to 24°C most of the year. The tierra templada, or the "tem- 
perate land," is characteristic of most of the central highlands, 
where elevations range between 750 and 1,600 meters. Here, 
daytime temperatures are mild (24°C to 27°C), and nights are 
cool (15°C to 21°C). Tierra fria, the "cold land," at elevations 
above 1,600 meters, is found only on and near the highest 
peaks of the central highlands. Daytime averages in this region 
are 22°C to 24°C, with nighttime lows below 15°C. 



59 




Figure 4. Topography and Drainage 
58 



Nicaragua: A Country Study 

Rainfall varies greatly in Nicaragua. The Caribbean lowlands 
are the wettest section of Central America, receiving between 
2,500 and 6,500 millimeters of rain annually. The western 
slopes of the central highlands and the Pacific lowlands receive 
considerably less annual rainfall, being protected from mois- 
ture-laden Caribbean trade winds by the peaks of the central 
highlands. Mean annual precipitation for the rift valley and 
western slopes of the highlands ranges from 1,000 to 1,500 mil- 
limeters. Rainfall is seasonal — May through October is the 
rainy season, and December through April is the driest period. 

During the rainy season, eastern Nicaragua is subject to 
heavy flooding along the upper and middle reaches of all 
major rivers. Near the coast, where river courses widen and 
river banks and natural levees are low, floodwaters spill over 
onto the floodplains until large sections of the lowlands 
become continuous sheets of water. River bank agricultural 
plots are often heavily damaged, and considerable numbers of 
savanna animals die during these floods. The coast is also sub- 
ject to destructive tropical storms and hurricanes, particularly 
from July through October. The high winds and floods accom- 
panying these storms often cause considerable destruction of 
property. In addition, heavy rains (called papagayo storms) 
accompanying the passage of a cold front or a low-pressure 
area may sweep from the north through both eastern and west- 
ern Nicaragua (particularly the rift valley) from November 
through March. Hurricanes or heavy rains in the central high- 
lands, where agriculture has destroyed much of the natural veg- 
etation, also cause considerable crop damage and soil erosion. 
In 1988 Hurricane Joan forced hundreds of thousands of Nica- 
raguans to flee their homes and caused more than US$1 billion 
in damage, most of it along the Caribbean coast. 

Demography 

Since the 1950s, Nicaragua has had a persistently high rate 
of population increase and rapid urban growth, both of which 
are expected to continue into the twenty-first century. The San- 
dinista revolution had little effect on these demographic 
trends. The Nicaraguan government has not carried out a 
national census since 1971, although it continued to register 
vital statistics and collect demographic data through periodic 
sample surveys of the population. A United Nations (UN) 
agency, the Latin American Center for Demography (Centro 
Latino-Americano de Demografia — Celade), has collaborated 



60 



The Society and Its Environment 



with Nicaraguan authorities in developing national population 
estimates. 

In 1990 an estimated 3.87 million people lived in Nicaragua 
(see table 2, Appendix A). The population had tripled in the 
preceding twenty-five years and was expected to double again 
in the following twenty-five (see fig. 5). In the late 1980s, the 
population was expanding at a rate of 3.4 percent annually, far 
above the Latin American average of 2.1 percent for the same 
period. 

This extraordinary growth reflects declining mortality and 
high fertility rates (see fig. 6). Mortality rates have dropped 
steadily since the 1950s. By 1990 the death rate, which had 
been high by regional standards, had dropped to 8 per 1,000 
inhabitants, close to the Latin American average of 7 per 1,000 
inhabitants. Nicaragua's total fertility rate in the 1980s was 5.7, 
meaning that a typical Nicaraguan woman could expect to have 
almost six children in the course of her childbearing years, two 
more than the regional average. Although total fertility and 
crude birth rates are expected to decline, both, according to 
demographic projections, should remain above Latin Ameri- 
can averages well into the next century. 

Continuing high fertility rates, together with a long-term 
reduction in the infant mortality rate, have produced a very 
young population. In 1990 nearly half of the population was 
less than fifteen years old. The broad base and rapidly tapering 
shape of Nicaragua's age-sex pyramid is typical of high-growth, 
developing countries. Although the pyramid can be expected 
to broaden in the middle as the population ages and mortality 
and fertility rates drop, the pyramid will not assume the almost- 
diamond shape typical of high-income countries until well into 
the twenty-first century (see fig. 7). 

Life expectancy at birth in Nicaragua advanced from about 
forty-five in the late 1950s to sixty-two in 1991. There are, nev- 
ertheless, considerable variations in these average figures. In 
general, women can expect to survive three years longer than 
men. Casual observation in Nicaragua and world experience 
suggest that city dwellers and more affluent segments of the 
population live significantly longer lives. The life expectancy of 
upper-class Nicaraguans was probably closer to the seventy-one- 
year average found in developed countries in 1988 than to the 
Nicaraguan national average of sixty-two. 

In 1993 Nicaragua was rapidly turning into an urban society. 
The thickening bands of shantytowns surrounding the larger 



61 



Nicaragua: A Country Study 




UJ 1 

0.5- 

ol—\ 1 1 1 1 

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 
YEARS 

Note--The percentage for a given year is a five-year average for that year and the subsequent four years. 
Figures for 1 955-1 989 estimated; 1 990-2014 projected. 



Source: Based on information from Boletin Demogrdfico /Demographic Bulletin, Santiago, 
Chile, 1990, 45. 

Figure 5. Annual Rate of Population Increase, 1955-2014 



cities provide ample evidence of the hectic pace of change. 
The government defines as urban all cities and towns with 
more than 1,000 inhabitants. By this standard, 55 percent of 
the population lived in urban areas in 1990. Although birth 
rates in the towns and cities are significantly lower than they 
are in the countryside, large-scale internal migration to towns 
and cities has resulted in the faster growth of the urban popula- 
tion. From 1970 to 1990, the urban population expanded at an 
explosive annual rate of 4 percent, whereas the rural popula- 
tion grew at only 2.3 percent. 

Much of the urban growth is concentrated in the capital 
city. The inhabitants of Managua constituted 7.5 percent of the 
national population in 1940, 15 percent in 1960, and 28 per- 
cent in 1980. By 1992 Managua's population was estimated at 
1.5 million. No other Nicaraguan city was anywhere near that 
size. The country's second largest city is Leon, an important 
regional center with a population of roughly 130,000 in 1990. 
The other important provincial cities, all with populations that 
range from 50,000 to 100,000, are Matagalpa, Masaya, and 
Granada. Somewhat smaller are the principal towns on the 



62 



The Society and Its Environment 




1955 1960 1965 19701975 1980 19851990 1995 2000 2005 2010 

YEARS 

1995-1989 estimated; 1990-2014 projected. 

Note--The percentage for a given year is a five-year average for that year and the subsequent four years. 
Figures for 1955-1989 estimated; 1990-2014 projected. 



Source: Based on information from Boletin Demogrdfico/Dernographic Bulletin, Santiago, 
Chile, 1990, 45. 

Figure 6. Crude Birth and Death Rates, 1955-2014 

Caribbean coast, Bluefields and Puerto Cabezas. However, 
accurate estimates of populations of Nicaraguan cities have not 
been available since the 1970s. 

Explosive population growth and rapid urbanization mag- 
nify many of Nicaragua's development problems (see fig. 8). 
High birth rates strain the country's inadequate health and 
education systems, and the expanding population takes a heavy 
toll on the environment. Rapid urbanization requires expen- 
sive investment in transportation and sanitation infrastruc- 
tures. Despite these problems, successive Nicaraguan 
governments (including the Sandinista administration) have 
declined to make population control a national priority. Nica- 



63 



Nicaragua: A Country Study 




400 300 200 100 



100 200 300 400 



POPULATION IN THOUSANDS 



Source: Based on information from Nicaragua, Instituto Nacional de Estadisticas y 
Censos, Nicaragua: lOAnos en Cifras, Managua, 1988, 11 



Figure 7. Population by Age and Sex, 1988 



raguans are, in fact, divided over the issue. Although some peo- 
ple regard excessive demographic growth as an obstacle to 
development, others question the notion that their country, 
with the lowest population density in Central America (32 per- 
sons per square kilometer in 1990), should worry about over- 
population. In addition, the hierarchy of the Nicaraguan 
Roman Catholic Church and other conservative Roman Catho- 
lics have repeatedly stated their religious objections to birth 
control. 

Nicaragua's population historically has been unevenly dis- 
tributed across the country. In pre-Columbian times, the 
Pacific lowlands, with their fertile soils and relatively benign cli- 
mate, supported a large, dense population. The central high- 
lands sustained smaller numbers, and the inhospitable 



64 



The Society and Its Environment 



7 
6 
5 

da 

s 

2 
1 





















_ 












= 












z 

















































19 


50 19 

(Census Fig 


63 19 

ures) 


71 19 

kRS 


80 19 

(Estimated) 


90 2010 

(Projected) 



Source: Based on information from Nicaragua, Instituto Nacional de Estadisticas y 
Censos, Nicaragua: lOAnos en Cijras, Managua, 1988, 11. 



Figure 8. Population, 1950-2010 



Caribbean lowlands were only sparsely populated. This basic 
settlement pattern remains unchanged 500 years later. More 
than 60 percent of Nicaraguans live within the narrow confines 
of the Pacific lowlands. About half as many live in the central 
highlands, but the Caribbean lowlands, covering more than 
half of the national territory, hold less than 10 percent of the 
population. In 1986 population densities ranged from 137 per- 
sons per square kilometer in the Pacific departments to 28 in 
the departments of the central highlands and fewer than 10 
persons in the two eastern autonomous regions. 

Ethnically, Nicaragua is a relatively homogeneous country. 
In 1993 some 86 percent of Nicaraguans were ladinos — people 
of European or mixed European and indigenous descent, who 
share a national Hispanic culture. In the nineteenth century, 
there was still a substantial indigenous minority, but this group 
largely has been assimilated culturally into the Hispanic main- 
stream. The country's racial composition is roughly as follows: 
mestizo (mixed indigenous-European), 76 percent; European, 
10 percent; indigenous, 3 percent; and Creoles (see Glossary), 



65 



Nicaragua: A Country Study 



or people of predominantly African ancestry, 11 percent. Mod- 
ern Nicaragua generally has been spared the bitter ethnic con- 
flicts that other Latin American countries with large culturally 
distinct indigenous populations have suffered. In Nicaragua, 
friction has involved relations between the ladinos, who pre- 
dominate in the west (the Pacific lowlands and central high- 
lands), and the nonladino minorities (indigenous peoples and 
Creoles) of the east or Caribbean lowlands. 

In social terms, the country is split into two zones: the eco- 
nomic and political heartland of the west, encompassing the 
Pacific lowlands and the central highlands; and the sparsely set- 
tled east or Caribbean lowlands. The west, containing the 
major urban centers, is populated by Spanish-speaking whites 
and mestizos, both of whom regard themselves as Nicaraguans 
and participate, to a greater or lesser extent, in national life. 
The east, historically remote from the centers of political and 
economic decision making on the other side of the mountains, 
includes a sizable indigenous and Creole population that has 
never identified with the nation or participated in national 
affairs. 

Almost the entire population of the Pacific lowlands and 
central highlands is either mestizo or white. Although no dis- 
tinct color line separates these two groups, social prestige and 
light skin color tend to be correlated, and the white minority is 
distinctly overrepresented among economic and political 
elites. Almost no culturally distinct indigenous enclaves remain 
in the western half of the country. Nicaraguans sometimes 
refer to the "Indian" barrio of Monimbo in Masaya, to the bar- 
rio of Subtiava in Leon, and to the highly acculturated Matagal- 
pan "Indians" in the central highlands, but the cultural 
patterns of these populations are almost indistinguishable 
from others who share their economic position. 

Having escaped assimilation into the Hispanic majority, the 
eastern, or Caribbean, hinterland is culturally heterogeneous. 
In many ways, it is a completely different country from the 
Spanish-speaking nation to the west. The Miskito, a mixed 
Indian-Afro-European people who speak an indigenous lan- 
guage, have traditionally been the largest ethnic group in the 
region. There are also smaller indigenous communities known 
as Sumu and Rama, a large group of Creoles, and a rapidly 
expanding mestizo population fed by migration from the west. 
In 1990 the Miskito and Sumu composed most of Nicaragua's 
indigenous population. 



66 



The Society and Its Environment 

Class Structure 

Describing the Nicaraguan class structure that existed in the 
early 1990s is a problematic task. Current data on the distribu- 
tions of occupation and income are not available. In the wake 
of a decade of Sandinista rule, certain aspects of the class struc- 
ture are still in flux. Nonetheless, the general profile of the 
class structure can be described with data from the recent past 
(see table 3, Appendix A). 

An outline of the Nicaraguan class structure, based on labor 
force and rural property data from 1980 and reflecting the 
1979 seizures of properties held by the Somoza family and 
other early expropriations under the Sandinistas, revealed a 
highly stratified society. Less than one-fifth of the population 
could be described as middle class or higher. Another study 
from the same period showed that 60 percent of income went 
to the top 20 percent of households. The data also indicated 
that although a high proportion of Nicaraguans were self- 
employed, relatively few held stable, salaried employment. Self- 
employed workers constituted almost half of the labor force in 
1980, and salaried workers made up less than 30 percent. 

Land is the traditional basis of wealth in Nicaragua, and in 
the twentieth century the greatest fortunes have come from 
land devoted to export production, including coffee, cotton, 
beef, and sugar. Almost all of the upper class and nearly a quar- 
ter of the middle class are substantial landowners. The rapid 
expansion of agro-export production in the decades after 
World War II encouraged growth of the urban economy. Plant- 
ers diversified their investments. Together with an expanding 
class of urban entrepreneurs, they found opportunities in 
banking, industry, commerce, construction, and other nonag- 
ricultural sectors. Economic growth created jobs for salaried 
managers and technicians. The impact of this period is 
reflected in the varied occupations held by the middle class. 

The rural lower class is characterized by its relationship to 
the agro-export sector. Rural workers are dependent on agri- 
cultural wage labor, especially in coffee and cotton. Only a 
minority hold permanent jobs. Most are migrants who follow 
crops during the harvest period and find whatever work they 
can during the off-season. The "lower" peasants are typically 
smallholders without sufficient land to sustain a family; they 
also join the harvest labor force. The "upper" peasants have 
enough resources to be economically independent. They pro- 
duce a substantial surplus, beyond what they can consume 



67 



Nicaragua: A Country Study 

directly, for national and even international markets. Studies 
have shown that peasant farmers supply much of the country's 
domestic grains, beef, and coffee. 

Many, if not most, of the workers in the urban lower class 
are dependent on the informal sector of the economy. The 
informal sector consists of small-scale enterprises that employ 
primitive technologies and operate outside the legal regime of 
labor protections and taxation to which large modern firms are 
subject. Workers in the informal sector are self-employed, 
unsalaried family workers or employees of small enterprises, 
and they are generally poor. In the past, many economists 
believed that the informal sector in Latin America was a rem- 
nant of past underdevelopment that would disappear with eco- 
nomic modernization. But in Nicaragua, as elsewhere in the 
region, the informal sector expanded at the same time that 
modern factories were being built and new technologies were 
transforming export agriculture. 

Nicaragua's informal sector workers include tinsmiths, mat- 
tress makers, seamstresses, bakers, shoemakers, and carpenters; 
people who take in laundry and ironing or prepare food for 
sale in the streets; and thousands of peddlers, owners of tiny 
businesses (often operating out of their own homes), and mar- 
ket stall operators. Some work alone, but others labor in the 
small talleres (workshops; sing., taller) that are responsible for a 
large share of the country's industrial production. Because 
informal sector earnings are generally very low, few families 
can subsist on one income. A man who works in a taller might 
have a wife at home making tortillas or a child on the street 
peddling cigarettes. 

The Sandinistas attempted to transform the Nicaraguan 
class structure, most notably by expropriating wealth from the 
privileged classes. Upon assuming power in 1979, the Sandi- 
nista government expropriated the banks and seized the prop- 
erty of the Somoza family and its closest associates. These early 
measures targeted the interests of the country's most powerful 
capitalists: the Somoza group and two competing financial 
groups, each organized around a separate bank. In subsequent 
years, the government gradually took over other large urban 
and rural enterprises, until the private sector was reduced to 
about half of the gross national product (GNP — see Glossary). 

In the countryside, where the Sandinista revolution proba- 
bly has had its most enduring effects, the Agrarian Reform Law 
transferred nearly a third of the total land under cultivation. 



68 




3 



Momotombo Volcano between Managua and Leon 
Courtesy Nicaraguan Tourism Institute 



Land expropriations began in 1979 with Somoza's properties, 
constituting about a fifth of all farmland, and continued under 
agrarian reform laws passed in 1981 and 1986. Most of the 
affected land belonged to the richest 5 percent of landowners, 
who, at the end of the Somoza period, controlled more than 
half of the land under cultivation. By 1988 the reform had ben- 
efited 60 percent of Nicaraguan peasant families: 43 percent 
received land, typically as members of government coopera- 
tives, and another 17 percent received the land (often located 
on the agricultural frontier) on which they had been squatters. 

The restructuring of land tenure between 1978 and 1988 
resulted in a sharp decline in the share of land held by the larg- 
est landowners. Expropriated farms generally became state 
farms or peasant cooperatives. By 1988 the land reform had 
passed through its most active phase. During the brief lame- 
duck period following the Sandinistas' electoral defeat in 1990, 
however, Sandinista authorities granted several thousand new 



69 



Nicaragua: A Country Study 

agrarian reform titles, often to land transferred from the state 
farm sector. Some properties, which later became objects of 
controversy, went to influential Sandinistas, but the net effect 
of these actions was to further reduce the concentration of 
land in the hands of the few 

The government of President Violeta Barrios de Chamorro 
(president, 1990- ) assumed power committed to privatizing 
the state sector in both urban and rural areas. But the new gov- 
ernment also agreed to reserve a 25 percent share of state sec- 
tor enterprises for their workers and to uphold the rights of the 
peasant beneficiaries of the agrarian reform. The government 
faced militant demands for land from ex-fighters on both sides 
of the civil war. Of roughly 300,000 hectares of state cotton, cof- 
fee, and cattle lands privatized by late 1991, former combatants 
received 38 percent, and farm workers received 32 percent. Far 
from attempting to reverse the agrarian reform, the Chamorro 
administration was compelled to extend it. 

The enduring effects of the Sandinista revolution on the 
Nicaraguan class structure may not be known for some time. In 
the early 1990s, the property situation remained unsettled. It 
was also uncertain how many of the businesspeople, profession- 
als, and skilled workers who became expatriates in the 1980s 
would reestablish themselves in the country. The Sandinistas 
did reduce class inequalities, most notably by eliminating the 
three major financial groups that once dominated the econ- 
omy and by redistributing land. They seem also to have altered 
the perceptions and expectations of the population. The gap 
between the privileged classes and the poor majority did not 
appear as proper or as inevitable as it did in the past. However, 
some key aspects of the class structure that existed before 1979 
remained unchanged. During the 1980s, the urban informal 
sector actually grew in size, and a large part of the rural popula- 
tion continued to depend on seasonal employment. Even 
before the economic collapse of the late 1980s wiped out the 
gains of the early Sandinista years, the vast majority of Nicara- 
guans lacked the resources to satisfy basic needs, according to a 
government study. 

Social Conditions 

Nicaragua was one of the poorest countries in the Western 
Hemisphere in 1992, with a per-capita gross domestic product 
(GDP — see Glossary) estimated at approximately US$425. In 
real terms, per-capita income was almost half of what it had 



70 



Nicaragua: A Country Study 

been in 1981. The country's low living standards are reflected 
in nutrition and housing data. In 1989 each Nicaraguan con- 
sumed 1,524 calories and forty-four grams of protein a day — 
well below minimum recommended allowances. Fewer than 
one in five urban households had sufficient income to pur- 
chase a minimum "market basket," as defined by the govern- 
ment. In the mid-1980s, 55 percent of urban houses and 67 
percent of rural houses consisted of a single room; nearly half 
lacked drinking water and plumbing. The national housing 
deficit, according to a 1990 estimate, was 420,600 units. 

A 1985 government study classified 69.4 percent of the pop- 
ulation as poor because they were unable to satisfy one or more 
of their basic needs in housing, sanitary services (water, sewer- 
age, and garbage collection), education, and employment. The 
defining standards for this study were set quite low. For exam- 
ple, housing was considered substandard if it was constructed 
of discarded materials with dirt floors or if it was occupied by 
more than four persons per room. Predictably, the poverty rate 
was higher in rural areas (85.9 percent) than in urban areas 
(54.8 percent). Regionally, the highest rate was recorded in the 
two eastern autonomous regions on the Caribbean coast (94.5 
percent) and the lowest in urban Managua (49.6 percent). 

Conditions in Nicaragua have fluctuated widely with the 
economic and political upheavals of recent decades. In the 
years from 1950 to 1975, real GDP per capita more than dou- 
bled, driven by the rapid growth in exports of coffee, cotton, 
and beef. Capital generated by agro-exports contributed to the 
development of a thriving industrial sector. In the three 
decades ending in 1980, the urban population expanded from 
35 percent to 53 percent of the total population. 

The benefits of this remarkable period of economic expan- 
sion have been unevenly distributed, however. Precise data are 
not available, but local observers have noted that the middle 
class blossomed and many new fortunes emerged during these 
growth years. Some benefits did flow to the lower class. For 
example, in the 1950s and 1960s, primary school enrollment 
grew 400 percent. Infant mortality, a significant indicator of 
social well-being, declined from 167 deaths per 1,000 live births 
in the period from 1950 to 1955 to 100 per 1,000 in the years 
from 1970 to 1975. Despite these gains, however, Nicaragua's 
school enrollment and infant mortality statistics remained 
poor by regional standards. The distribution of income in the 
1970s was highly skewed, probably more so than it had been in 



72 



The Society and Its Environment 



the past: 30 percent of personal income went to the richest 5 
percent of households, but only 15 percent went to the poorest 
50 percent. Furthermore, some of the poorest Nicaraguans 
were the direct victims of economic development. As agro- 
export production expanded in the Pacific lowlands and the 
central highlands, thousands of peasants were pushed off their 
land, many of them to be converted into low-wage, seasonally 
employed agricultural laborers. Between 1965 and 1975, the 
GNP and the number of children under five years of age suffer- 
ing from malnutrition both doubled. Clearly, many Nicara- 
guans were getting poorer as their country grew richer. 

The Sandinista revolution brought a new cycle of upheaval 
to Nicaraguan society. The 1978-79 insurrection that toppled 
the Somoza regime left 30,000 to 50,000 people dead, a large 
population homeless, several cities devastated by government 
bombing, and extensive damage to the economy, including the 
destruction of much of Managua's modern industrial district. 
After they assumed power, the Sandinistas reversed the 
national priorities established under the Somozas. Their prime 
policy objective in the early years was to promote the welfare of 
the poor majority; national economic growth was a secondary 
concern. Government policy in areas from land reform and 
nutrition to health and education was strongly redistributive. 
In the early 1980s, generous spending on social programs was 
sustained by a relatively healthy economy and high levels of for- 
eign aid from both Western and Soviet bloc countries. 

In the late 1980s, however, the resources available for social 
programs declined as foreign aid dried up, the economy floun- 
dered, and war with the Gontras (short for contrarevoluciona- 
rios — see Glossary) compelled the government to redirect 
spending toward national defense. Living standards sank 
abruptly during this period. By the end of the decade, the aver- 
age real wage had dropped to less than 10 percent of its 1985 
value, nearly half the labor force was unemployed or underem- 
ployed, and the poverty rate was rising. Infant mortality, which 
had declined sharply in the early years of Sandinista rule, 
began to rise again. The death rate per 1,000 live births was 97 
in 1978, the last full year of the Somoza regime; 63 in 1985; and 
72 in 1989. For several years, the Contra war disrupted social 
and economic life across the country, but especially in con- 
tested zones like northeastern Nicaragua and the northern 
central highlands. In such areas, Contra forces targeted both 
economic and social infrastructure, including agrarian reform 



73 



Nicaragua: A Country Study 

farms, schools, and health facilities. More than 20,000 Nicara- 
guans died in the fighting, and thousands of others were left 
maimed or crippled. 

Conditions improved after fighting largely stopped in 1988. 
Democratic elections, followed by peaceful transition to a new 
government in 1990, resulted in the lifting of the United States 
trade embargo imposed in 1982, renewal of United States aid, 
and the removal of informal barriers to international credits. 
The Nicaraguan economy was, however, slow to respond to 
these changes. GDP continued to decline in 1990, and no 
growth was recorded in 1991. Despite making deep cuts in mil- 
itary forces, the new government did not have the resources to 
restore spending on social programs to prewar levels. 

Education 

When the Sandinistas came to power in 1979, they inherited 
an education system that was one of the poorest in Latin Amer- 
ica. Under the Somozas, limited spending on education and 
generalized poverty, which forced many adolescents into the 
labor market, constricted educational opportunities for Nicara- 
guans. In the late 1970s, only 65 percent of primary school-age 
children were enrolled in school, and of those who entered 
first grade only 22 percent completed the full six years of the 
primary school curriculum (see table 4, Appendix A). Most 
rural schools offered only one or two years of schooling, and 
three-quarters of the rural population was illiterate. Few stu- 
dents enrolled in secondary school, in part because most sec- 
ondary institutions were private and too expensive for the 
average family. By these standards, the 8 percent of the college- 
age population enrolled in Nicaraguan universities seemed rel- 
atively high. Less surprising was that upper-class families typi- 
cally sent their children abroad for higher education. 

By 1984 the Sandinista government had approximately dou- 
bled the proportion of GNP spent on preuniversity education, 
the number of primary and secondary school teachers, the 
number of schools, and the total number of students enrolled 
at all levels of the education system. A 1980 literacy campaign, 
using secondary school students as volunteer teachers, reduced 
the illiteracy rate from 50 percent to 23 percent of the total 
population. (The latter figure exceeds the rate of 13 percent 
claimed by the literacy campaign, which did not count adults 
whom the government classified as learning impaired or other- 
wise unteachable.) In part to consolidate the gains of the liter- 



74 



Rural family fetching water from a communal tap 

Courtesy Nina Serafino 

acy campaign, the Ministry of Education set up a system of 
informal self-edu cation groups known as Popular Education 
Cooperatives. Using materials and pedagogical advice provided 
by the ministry, residents of poor communities met in the eve- 
nings to develop basic reading and mathematical skills. 
Although designed for adults, these self-education groups also 
served children who worked by day or could not find a place in 
overcrowded schools. 

At the college level, enrollment jumped from 11,142 stu- 
dents in 1978 to 38,570 in 1985. The Sandinistas also reshaped 
the system of higher education: reordering curricular priori- 
ties, closing down redundant institutions and programs and 
establishing new ones, and increasing lower-class access to 
higher education. Influenced by Cuban models, the new cur- 
ricula were oriented toward development needs. Agriculture, 
medicine, education, and technology grew at the expense of 
law, the humanities, and the social sciences. 

One of the hallmarks of Sandinista education (and favored 
target of anti-Sandinista criticism) was the ideological orienta- 
tion of the curriculum. The stated goal of instruction was the 
development of a "new man," whose virtues were to include 
patriotism, "internationalism," an orientation toward produc- 



75 



Nicaragua: A Country Study 



tive work, and a willingness to sacrifice individual interests to 
social and national interests. School textbooks were nationalist 
and prorevolutionary in tone, giving ample coverage to Sandi- 
nista heroes. After the 1990 election, the Chamorro govern- 
ment placed education in the hands of critics of Sandinista 
policy, who imposed more conservative values on the curricu- 
lum. A new set of textbooks was produced with support from 
the United States Agency for International Development 
(AID), which had provided similar help during the Somoza 
era. 

Despite the Sandinistas' determined efforts to expand the 
education system in the early 1980s, Nicaragua remained an 
undereducated society in 1993. Even before the Contra war 
and the economic crisis that forced spending on education 
back to the 1970 level, the education system was straining to 
keep up with the rapidly growing school-age population. 
Between 1980 and 1990, the number of children between five 
and fourteen years of age had expanded by 35 percent. At the 
end of the Sandinista era, the literacy rate had declined from 
the level attained at the conclusion of the 1980 literacy cam- 
paign. Overall school enrollments were larger than they had 
been in the 1970s, however, and, especially in the countryside, 
access to education had broadened dramatically. But a substan- 
tial minority of primary school-age children and three-quarters 
of secondary school-age students were still not in school, and 
the proportion of students who completed their primary edu- 
cation had not advanced beyond the 1979 level. Even by Cen- 
tral American standards, the Nicaraguan education system was 
performing poorly. 

Health 

Like education, health care was among the top priorities of 
the Sandinista government. At the end of the Somoza era, most 
Nicaraguans had no access or only limited access to modern 
health care. Widespread malnutrition, inadequate water and 
sewerage systems, and sporadic application of basic public 
health measures produced a national health profile typical of 
impoverished populations. Enteritis and other diarrheal dis- 
eases were among the leading causes of death. Pneumonia, tet- 
anus, and measles, largely among children less than five years 
old, accounted for more than 10 percent of all deaths. Malaria 
and tuberculosis were endemic. 



76 



The Society and Its Environment 



By the beginning of 1991, twenty-eight persons had tested 
positive for the human immunodeficiency virus (HIV) that 
causes acquired immune deficiency syndrome (AIDS), and 
eight of those individuals had died. These figures were low in 
comparison with neighboring countries, but health officials 
regarded them as accurate because the government had con- 
ducted an aggressive search for HIV among prostitutes, blood 
donors, and tuberculosis patients in the late 1980s. The same 
officials cautioned against complacency toward AIDS. A large 
number of sexually transmitted diseases was reported in Man- 
agua and Bluefields, and if HIV were introduced into groups 
with multiple sex partners, AIDS cases would rise rapidly. 

Nicaraguans depend on a three-tier health system that 
reflects the fundamental inequalities in Nicaraguan society. 
The upper class uses private health care, often going abroad 
for specialized treatment. A relatively privileged minority of sal- 
aried workers in government and industry are served by the 
Nicaraguan Social Security Institute. These workers and their 
families compose about 8 percent of the population, but the 
institute devours 40 to 50 percent of the national health care 
budget. The remainder of the population, approaching 90 per- 
cent, is poorly served at public facilities that are typically mis- 
managed, inadequately staffed, and underequipped. Health 
care services are concentrated in the larger cities, and rural 
areas are largely unserved. In fact, the Ministry of Health, 
which has sole responsibility for rural health care, preventive 
health care, and small clinics, received only 16 percent of the 
health budget in 1992, most of which it spent in Managua. 

In the early 1980s, the Sandinista government restructured 
and reoriented the entire health care system. Following a rec- 
ommendation made by AID in 1976, authorities combined the 
medical functions of the Ministry of Health, the Nicaraguan 
Social Security Institute, and some twenty other quasi-autono- 
mous health care agencies from the Somoza era into a unified 
health care system. Within a few years, spending on health care 
was substantially increased, access to services was broadened 
and equalized, and new emphasis was placed on primary and 
preventive medicine. During this period, the number of stu- 
dents annually entering medical school jumped from 100 to 
500, five new hospitals were built (largely with foreign aid), and 
a national network of 363 primary care health clinics was cre- 
ated. With help from the United Nations Children's Fund 
(UNICEF), 250 oral rehydration centers were established to 



77 



Nicaragua: A Country Study 

treat severe childhood diarrhea, the leading cause of infant 
deaths, with a simple but effective solution of sugar and salts. 
The Ministry of Health trained thousands of community health 
volunteers (health brigadistas) and mobilized broad community 
participation in periodic vaccination and sanitation campaigns. 

The expansion of access to health care was reflected in a 
doubling of the number of medical visits per inhabitant and a 
reduction from 64 percent to 38 percent in Managua's share of 
total medical visits between 1977 and 1982. These early years 
also saw a substantial drop in infant mortality and reductions in 
the incidence of transmittable diseases such as polio, pertussis, 
and measles. 

In health as in education, some of the ground gained in the 
early 1980s was lost during the second half of the decade. 
Health care activities, including vaccination campaigns, had to 
be curtailed in regions experiencing armed conflict. The 
health care system was flooded with war victims. Among an 
increasingly impoverished population, children especially grew 
more vulnerable to disease. But the steep economic decline 
and tight budgetary restraints of the period resulted in severe 
shortages of medicines and basic medical supplies. In addition, 
deteriorating salaries drove many doctors out of public employ- 
ment. 

Despite the problems of the late 1980s, however, the Sandi- 
nista decade left behind an improved health care system. 
According to a 1991 AID assessment of Nicaraguan develop- 
ment needs, the Chamorro government inherited a health 
care system that emphasized preventive and primary care; tar- 
geted the principal causes of infant, child, and maternal mor- 
tality; provided broad coverage; and elicited high levels of 
community participation. The AID report noted the effective- 
ness of the oral rehydration centers, the wide coverage of vacci- 
nation campaigns, and the key role of the health brigadistas, 
three programs maintained by the new government. The 
report concluded that the major problem of the health sector 
was lack of budgetary resources. 

Family 

In the 1990s, traditional Hispanic kinship patterns, com- 
mon to most of Latin America, continued to shape family life 
in Nicaragua. The nuclear family forms the basis of family 
structure, but relationships with the extended family and god- 
parents are strong and influence many aspects of Nicaraguan 



78 



New health clinic in Matagalpa 
Courtesy Nina Serafino 



life. Because few other institutions in the society have proved as 
stable and enduring, family and kinship play a powerful role in 
the social, economic, and political relations of Nicaraguans. 
Social prestige, economic ties, and political alignments fre- 
quently follow kinship lines. Through the compadrazgo (see 
Glossary) system (the set of relationships between a child's par- 
ents and his or her godparents), persons unrelated by blood or 
marriage establish bonds of ritual kinship that are also impor- 
tant for the individual in the society at large. 

Nicaraguan institutions, from banks to political parties, have 
traditionally been weak and more reflective of family loyalties 
and personal ties than broader institutional goals and values. 
For several decades prior to 1979, the Nicaraguan state was 
scarcely differentiated from the Somoza family. Family ties 
played a diminished but still critical role in the politics of the 
1980s and early 1990s. The Roman Catholic Church, which, 
until recently, had little or no presence in the countryside, still 
does not touch the lives of most Nicaraguans. To survive in a 
country whose history is replete with war, political conflict, and 
economic upheaval, Nicaraguans turn to the one institution 
they feel they can trust — the family. As a result, individuals are 
judged on the basis of family reputations, careers are advanced 



79 



Nicaragua: A Country Study 

through family ties, and little stigma is attached to the use of 
institutional position to advance the interests of relatives. For 
both men and women, loyalty to blood kin is frequently stron- 
ger than loyalty to a spouse. 

Most Nicaraguan families are built around conjugal units. 
Outside of the upper and middle classes, however, relatively 
few couples formalize their marriages through the church or 
state. Legislation passed in the 1980s recognized this situation 
by giving common-law unions the same legal status as civil mar- 
riages. Although stable monogamous unions and strong patri- 
archal authority at home are deeply ingrained cultural ideals, 
at least a third of Nicaraguan families were headed by women 
in the 1980s. Among urban households, this proportion is even 
higher. 

Because of high fertility and the presence of relatives 
beyond the nuclear family, households are large — six to eight 
people are common. The Nicaraguan household is typically 
augmented by the presence of a grandparent, an aunt or uncle, 
an orphaned relative, a poor godchild, or a daughter with chil- 
dren of her own. Newly married couples sometimes take up 
residence in the home of one of the parental families. In the 
countryside, peasants feel that a large number of children 
helps them meet their everyday labor needs and provides for 
their own security in old age. Families are smaller in the city, 
but housing shortages and low incomes encourage the urban 
poor to create expanded households that can share shelter and 
pool resources. 

Both traditional values and practical considerations support 
the maintenance of strong ties with a large kinship network 
outside the household. Nicaraguans maintain ties with kin of 
the same generation, which may extend to fourth or fifth cous- 
ins. Peasant patriarchs build rural clans by accumulating small 
parcels of land near their own land for the families of sons and 
daughters. City people of all classes look to relatives for jobs 
and other forms of economic assistance. In times of economic 
crisis, the survival strategies of the urban poor often center on 
mutual assistance among kin. 

Like other Nicaraguans, members of the upper class main- 
tain relations with extensive numbers of kin. In addition to 
these "horizontal" ties, however, they place special emphasis on 
"vertical" descent. Upper-class Nicaraguans are much more 
likely than their compatriots to be aware of ancestors more 
than two generations removed from the present. This tendency 



80 



Equestrian parade in Managua 
Courtesy Nicaraguan Tourism Institute 

is supported by shared family fortunes, which have been passed 
from generation to generation, and by the prominence of his- 
torical surnames rooted in the eighteenth and nineteenth cen- 
turies. 

Through the institution of compadrazgo, the attributes of kin- 
ship are extended to those not related by blood or marriage. 
When an infant is baptized, the parents choose a godfather 
(padrino) and godmother (madrina) for their child. This prac- 
tice is common to Roman Catholics around the world, but in 
Nicaragua and many other Latin American countries, it 
assumes a broader social significance. Compadrazgo establishes 
relationships similar to those of actual kinship not only 
between the child and the godparents, but also between the 
parents and the godparents. The latter relationships are recog- 
nized through the use of compadre and comadre (literally, co- 
father and co-mother) as reciprocal terms of address between 
the child's parents and godparents. The godparents are 
responsible for the baptism ceremony and the festivities after- 
ward. They are also expected to concern themselves with the 
welfare of the child and his or her family, and come to their aid 
in times of hardship. 



81 



Nicaragua: A Country Study 

Godparents are typically trusted friends of the parents. 
However, lower-class families (for whom the compadrazgo has 
the greatest significance) often chose godparents of superior 
economic, political, or social status, who are in a position to 
help the child in the future. Large landowners, affluent busi- 
nesspeople, government officials, and political leaders may 
become godfathers to the children of social inferiors in order 
to build up a system of personal loyalties. In such cases, com- 
padrazgo becomes the basis of a network of patron-client rela- 
tionships. 

The Lives of Women 

Collectively, the lives of Nicaraguan women are shaped by 
traditional Hispanic values regarding appropriate sex roles and 
high fertility, the prevalence of female-headed households, and 
an increasing rate of participation in the labor force. Although 
the Sandinista revolution drew thousands of women into pub- 
lic life, encouraged females to work outside the home, spawned 
a national women's movement, and enshrined gender equality 
in the national constitution, it left largely intact the values, 
beliefs, and social customs that traditionally had regulated rela- 
tions between the sexes. 

Virility, sexual prowess, independence, protectiveness, asser- 
tiveness, and a drive to dominate have traditionally been 
expected of the male. Dependence, devotion, submissiveness, 
and faithfulness are attributes that the female ideally reflected. 
From adolescence, men are encouraged to demonstrate their 
machismo (masculinity) through acts of sexual conquest. Mar- 
ried men commonly have regular extramarital relations and 
even maintain more than one household. However, premarital 
and extramarital relations, more or less expected from men, 
are stigmatized in women. The ideal female role, glorified in 
the culture, is that of mother. Her place is in the home, and 
her duty is to raise her children. 

The ideal expectations of the culture do not prevent most 
Nicaraguan women from becoming sexually active early in life: 
38 percent by age sixteen and 73 percent by age nineteen, 
according to one study. This phenomenon contributes to the 
high birth rates noted earlier, as does a lack of use of contra- 
ceptives. In 1986 the Ministry of Health estimated that, because 
of lack of knowledge and the limited availability of contracep- 
tives, only 26 percent of sexually active women practiced con- 
traception. An informal poll of 200 Nicaraguan women of 



82 



The Society and Its Environment 



diverse educational and class backgrounds revealed that only 
ten were aware that women are most fertile at the midpoint of 
the menstrual cycle. The Nicaraguan Roman Catholic Church 
has publicly condemned contraception other than the rhythm 
method. Although most Nicaraguans are probably not even 
aware of the church's position, it appears to have influenced 
government policy. 

In most cases, abortion is illegal but not uncommon in Nica- 
ragua. Although affluent women have access to medical abor- 
tions, poorer women generally depend on more dangerous 
alternatives. During the 1980s, when lax enforcement 
expanded access to medical abortion, studies conducted at a 
large maternity hospital in Managua determined that illicit 
abortions accounted for 45 percent of admissions and were the 
leading cause of maternal deaths. Relatively few of the victims 
of botched abortions are single women, and the majority have 
had pregnancies earlier in life. The most common reasons for 
seeking abortion are abandonment by the father and strained 
family budgets. 

Many Nicaraguan women spend at least part of their lives as 
single mothers. Early initiation of sexual activity and limited 
practice of contraception contribute to this phenomenon, as 
does the very character of the Nicaraguan economy. The key 
agro-export sector requires a large migrant labor force. The 
long months that agricultural workers spend away from home 
harvesting coffee and cotton greatly disrupt family life and 
often lead to abandonment. 

The steadily growing proportion of women in the labor 
force results, for the most part, from their being single heads of 
households. The vast majority of female heads of households 
work, and they are twice as likely to be employed as married 
women. Women's share of the labor force rose from 14 percent 
in 1950 to 29 percent in 1977 and to 45 percent in 1989. By the 
1980s, women predominated in petty commerce, personal ser- 
vices, and certain low-wage sectors such as the garment indus- 
try. Peasant women traditionally have performed agricultural 
labor as unpaid family workers; their economic significance 
thus probably has been underestimated by official labor statis- 
tics. By the 1980s, however, they formed a large and growing 
part of the salaried harvest labor force in cotton and coffee. 
Because men assume little of the domestic workload, the 
growth in female labor force participation has meant a double 
workday for many Nicaraguan women. Middle- and upper-class 



83 



Nicaragua: A Country Study 

women have a good chance of escaping this trap as they are 
much less likely to work outside the home and can depend on 
domestic help for household duties. 

Religion 

In the early 1990s, the majority of Nicaraguans were nomi- 
nally Roman Catholic. Many had little contact with their 
church, however, and the country's Protestant minority was 
expanding rapidly. Roman Catholicism came to Nicaragua in 
the sixteenth century with the Spanish conquest and 
remained, until 1939, the established faith. The Roman Catho- 
lic Church was accorded privileged legal status, and church 
authorities usually supported the political status quo. Not until 
the anticlerical General Jose Santos Zelaya (1893-1909) came 
to power was the position of the church seriously challenged. 

Nicaraguan constitutions have provided for a secular state 
and guaranteed freedom of religion since 1939, but the Roman 
Catholic Church has retained a special status in Nicaraguan 
society. When Nicaraguans speak of "the church," they mean 
the Roman Catholic Church. The bishops are expected to lend 
their authority to important state occasions, and their pro- 
nouncements on national issues are closely followed. They can 
also be called upon to mediate between contending parties at 
moments of political crisis. A large part of the education sys- 
tem, in particular the private institutions that serve most upper- 
and middle-class students, is controlled by Roman Catholic 
bodies. Most localities, from the capital to small rural commu- 
nities, honor patron saints, selected from the Roman Catholic 
calendar, with annual fiestas. Against this background, it is not 
surprising that the Sandinista government provided free public 
transportation so that 500,000 Nicaraguans, a substantial part 
of the national population, could see Pope John Paul II when 
he visited Managua in 1983 (see The Growth of Opposition, 
1981-83, ch. 1). 

Despite the leading position of the Roman Catholic Church, 
it touches the lives of most Nicaraguans only sporadically at 
best. The activities and resources of the church are concen- 
trated in the cities. Although the church attempts to reach peo- 
ple in small towns and rural areas, its capacity to do so is 
limited. In the mid-1980s, there was approximately 1 priest for 
every 7,000 Roman Catholics, a ratio lower than the Latin 
American average and considerably lower than the 1 priest per 
4,550 Nicaraguan Roman Catholics recorded in 1960. 



84 



The Society and Its Environment 



Urbanites, women, and members of the upper and middle 
classes are the most likely to be practicing Roman Catholics, 
that is, those who attend mass, receive the sacraments, and per- 
form special devotions with some degree of regularity. Nicara- 
guans of the lower classes tend to be deeply religious but not 
especially observant. Many limit their practice of the sacra- 
ments to baptism and funeral rites. Yet they have a strong belief 
in divine power over human affairs, which is reflected in the 
use of phrases such as "God willing" or "if it is God's desire" in 
discussions of future events. 

Religious beliefs and practices of the masses, although more 
or less independent of the institutional church, do not entail 
the syncretic merger of Roman Catholic and pre-Columbian 
elements common in some other parts of Latin America. Popu- 
lar religion revolves around the saints, who are perceived as 
intermediaries between human beings and God. Prayers are 
directed to a relevant saint asking for some benefit, such as cur- 
ing an illness, in exchange for ritual payment, such as carrying 
a cross in an annual procession. Pictures of saints, called 
cuadros, are commonly displayed in Nicaraguan homes. Set in a 
corner or on a table and surrounded with candles, flowers, or 
other decorations, a cuadro becomes the centerpiece of a small 
domestic shrine. In many communities, a rich lore has grown 
up around the celebrations of patron saints, such as Managua's 
Saint Dominic (Santo Domingo), honored in August with two 
colorful, often riotous, day-long processions through the city's 
lower-class neighborhoods. The high point of Nicaragua's reli- 
gious calendar for the masses is neither Christmas nor Easter, 
but La Purisima, a week of festivities in early December dedi- 
cated to the Immaculate Conception, during which elaborate 
altars to the Virgin Mary are constructed in homes and work- 
places. 

Protestantism and other Christian sects came to Nicaragua 
during the nineteenth century, but only during the twentieth 
century have Protestant denominations gained large followings 
in the western half of the country. By 1990 more than 100 non- 
Roman Catholic faiths had adherents in Nicaragua, of which 
the largest are the Moravian Church, the Baptist Convention of 
Nicaragua, and the Assemblies of God. Other denominations 
include the Church of God, the Church of the Nazarene, the 
Episcopal Church, the Church of Jesus Christ of Latter-Day 
Saints (Mormons), Jehovah's Witnesses, and the Seventh Day 
Adventists. Most of these churches have been established 



85 



Nicaragua: A Country Study 

through the efforts of missionaries from the United States and, 
although now institutionally independent and led by Nicara- 
guans, retain strong links with members of the same denomina- 
tion in the United States. 

The Moravian Church, established in eastern Nicaragua in 
the late nineteenth century, is the dominant faith among the 
non-Hispanic population of the region. Virtually all Miskito are 
Moravians, as are many Creoles, Sumu, and Rama. Moravian 
pastors play a prominent leadership role in Miskito communi- 
ties. The Nicaraguan Baptists are related to the American Bap- 
tist Church, which began missionary work in 1917. The 
Nicaraguan Baptist Church's membership is concentrated in 
the Pacific region and is heavily middle class. 

The Assemblies of God, dating from 1926, is the largest of 
the rapidly expanding Pentecostal denominations. Known for 
ecstatic forms of worship, energetic evangelization, and the 
strict personal morality demanded of members, the Pentecostal 
faiths are flourishing among the urban and rural poor. By help- 
ing recent arrivals from the countryside adjust to city life, they 
draw many migrants into their congregations. Pentecostalism 
reportedly has particular appeal to poor women because it elic- 
its sobriety and more responsible family behavior from men. 
Largely because of the Pentecostals, the long-stagnant Protes- 
tant population has accelerated in numbers, going from 3 per- 
cent of the national population in 1965 to more than 20 
percent in 1990. It could easily surpass 30 percent in the 1990s. 

The 1970s and 1980s were years of religious ferment in Nic- 
aragua, often coupled with political conflict. Encouraged by 
the spirit of liberal renovation then sweeping through Latin 
American Catholicism, a new generation of Nicaraguan Roman 
Catholic Church officials and lay activists tried to make the 
Roman Catholic Church more democratic, more worldly in its 
concerns, and more sensitive to the plight of the poor majority. 
Many were inspired by the radical doctrines of liberation theol- 
ogy (see Glossary) and the related idea of consciousness-raising 
Christian base communities (small groups of people from an 
urban slum or rural district who met regularly to read the Bible 
together and reflect on social conditions). In the 1970s, priests, 
nuns, and lay workers committed to social change organized 
community development projects, education programs, and 
Roman Catholic base communities. Especially after 1972, 
Roman Catholic clergy and lay activists were increasingly drawn 
into the movement opposed to the regime of Anastasio Somoza 



86 



Views of Managua, with Lago de Managua in the background 

Courtesy Nina Serafino 



87 



Nicaragua: A Country Study 

Debayle. Many developed links with the Sandinista National 
Liberation Front (Frente Sandinista de Liberation Nacional — 
FSLN), which was very receptive to radicalized Roman Catho- 
lics and led the insurrection that finally toppled the dictator. 

No previous Latin American revolution has had such broad 
religious support as that of the Sandinistas. Even the Roman 
Catholic bishops openly backed the anti-Somoza movement in 
its final phases. In the late 1970s and early 1980s, the Roman 
Catholic Christian Base Communities (Comunidades Eclesiasti- 
cas de Base — CEBs) provided the FSLN with vital political sup- 
port among the urban poor. Roman Catholics, including 
several priests, accepted positions in the new government and 
became members of the Sandinista party. But the close ties 
between Sandinistas and Roman Catholics generated tensions 
within the Roman Catholic Church and between the Roman 
Catholic hierarchy and the FSLN. The bishops, led by Cardinal 
Miguel Obando y Bravo, accused the Sandinistas and their 
Roman Catholic supporters of attempting to divide the church 
by creating a separate Popular Church out of the CEBs. They 
viewed the Marxist-oriented FSLN as a long-term threat to reli- 
gion in Nicaragua, despite the professed tolerance of the San- 
dinistas. An explosive church-state conflict developed, during 
which the bishops more or less openly allied with the Sandini- 
stas' political enemies and the FSLN struggled vainly to contain 
the influence of the institutional church. Throughout the 
1980s, pro- and anti-Sandinista forces regularly manipulated 
religious symbols for political effect. 

Protestant leaders were less inclined than the Roman Catho- 
lic episcopate to become embroiled in conflicts with the Sand- 
inistas. Some, including prominent Baptist ministers and a 
minority of pastors from other faiths, were sympathetic to the 
FSLN. At the other extreme, a few Moravian ministers openly 
identified with Miskito Contra forces operating from Hondu- 
ras. Most Pentecostal leaders, reflecting the conservative atti- 
tudes of the United States denominations with which they were 
affiliated, were cool toward the Sandinistas but generally 
adopted a public stance that was apolitical. Suspecting that the 
United States Central Intelligence Agency (CIA) and Christian 
conservatives in the United States were promoting evangelical 
activity in Nicaragua to undercut their government, Sandinista 
authorities monitored and tried to intimidate certain Pentecos- 
tal leaders. They did not, however, attempt to limit the growth 
of normal religious activity. The expansion of the Protestant 



88 



The Society and Its Environment 



population actually accelerated under Sandinista rule. During 
the first five years of Sandinista government, the number of 
evangelical churches (largely Pentecostal) doubled to 3,000. 

By the time the Sandinistas left power in 1990, church-state 
relations were considerably smoother than they had been in 
the early 1980s and mid-1980s, in part because the Contra war, 
which intensified conflict over religion, was winding down. 
Some of the radicalized Roman Catholics who had supported 
the Sandinistas in the years since the 1970s remained loyal to 
them, but their influence outside the Sandinista movement 
and a few religious think tanks was limited. The number of 
active CEBs plunged in the early 1980s and never recovered, in 
part because the bishops had systematically restricted the 
church-based activities of pro-Sandinista clergy. The Pentecos- 
tal churches continued their rapid growth among the poor, 
eclipsing the radical branch of Roman Catholicism and chal- 
lenging the Roman Catholic Church's traditional religious 
monopoly. By the early 1990s, the Pentecostal minority was 
large enough to cause some observers, aware of the recent role 
of Christian conservatives in United States politics, to speculate 
about the influence of Pentecostals in future Nicaraguan elec- 
tions. 

Caribbean Society 

Nicaragua's extensive Caribbean lowlands region, compris- 
ing the country's two autonomous regions and the department 
of Rio San Juan, has never been fully incorporated into the 
nation. This area, known as the Costa de Mosquitos, is isolated 
from western Nicaragua by rugged mountains and dense tropi- 
cal rainforest. Communications across these barriers are poor. 
In 1993 there was still no paved road between the cities of the 
Pacific region and the Caribbean littoral. Costeilos (the indige- 
nous peoples and Creoles native to the Caribbean lowlands) 
are also divided by history and culture from the whites and 
mestizos of the west, whom they call "the Spanish." 

The Caribbean lowlands were never part of the Spanish 
empire but were, in effect, a British protectorate beginning in 
the seventeenth century (see Colonial Rule, ch. 1). In the 
mid-nineteenth century, the United States displaced Britain as 
the region's protecting power. Not until 1894 did the entire 
region come under direct Nicaraguan administration. Even 
then, continuing United States political weight, commercial 
activity, and missionary interest in the Caribbean lowlands 



89 



Nicaragua: A Country Study 

eclipsed the weak influence of western Hispanic Nicaragua 
until World War II. As a result of this history, costenos have not 
traditionally regarded themselves as Nicaraguans. Rather, they 
see Nicaraguan rule as an alien imposition and fondly recall 
the years of semisovereignty and intermittent prosperity they 
enjoyed under British and American tutelage. Costenos are 
more likely to speak English or an indigenous language at 
home than Spanish. Most are Protestants, generally Moravians; 
those who became Roman Catholics did so under the influence 
of priests from the United States rather than from Nicaragua. 

The Caribbean lowlands are home to a multiethnic society. 
Miskito, Creoles, and mestizos account for most of the popula- 
tion of the region, but there are also small populations of 
Sumu, Rama, and Garifuna, an Afro-Carib group. The Miskito, 
the largest of the indigenous groups, themselves reflect the 
region's diverse ethnic history. Like the Sumu, they are linguis- 
tically related to the Chibcha of South America. Their culture 
reflects adaptations to contacts with Europeans that stretch 
back to their seventeenth-century collaboration with English, 
French, and Dutch pirates. Their genetic heritage is from 
indigenous, European, and African ancestors. During the colo- 
nial period, the Miskito, allied with Britain, became the domi- 
nant group in the Caribbean lowlands. A Miskito monarchy, 
established over the region with British support in 1687, 
endured into the nineteenth century. 

The Miskito population is concentrated in northeastern- 
most Nicaragua, around the interior mining areas of Siuna, 
Rosita, and Bonanza, and along the banks of several rivers that 
flow east out of the highlands to the Caribbean. Honduras also 
has a large Miskito population in territory adjoining Nicara- 
gua. In modern times, the Miskito have survived by alternating 
subsistence activities with wage labor, often in foreign-con- 
trolled extractive enterprises. 

The black people of the Caribbean region, known as Cre- 
oles, are the descendants of colonial-era slaves, Jamaican mer- 
chants, and West Indian laborers who came to work for United 
States lumber and banana companies. As British influence 
receded from the Caribbean lowlands in the nineteenth cen- 
tury, the Creoles displaced the Miskito at the top of the 
region's ethnic hierarchy and became the key colonial interme- 
diary. Concentrated in the coastal cities of Bluefields and 
Puerto Cabezas, on the Islas del Maiz, and around Laguna de 
Perlas, the contemporary Creoles are English-speaking, 



90 



The Society and Its Environment 



although many speak Miskito or Spanish as a second language. 
As a group, they are urban, well educated, and amply repre- 
sented in skilled and white-collar occupations. The Creoles are 
disdainful of indigenous groups, over whom they maintain a 
distinct economic advantage. All Caribbean groups, however, 
share the traditional costeilo resentment of the western His- 
panic elite. 

The expanding mestizo population in the Caribbean low- 
lands is concentrated in the region's western areas, inland from 
the Caribbean littoral. Many live in mining areas. Since the 
1950s, the expansion of export agriculture in the western half 
of the country has forced many dispossessed peasants to seek 
new land on the agricultural frontiers. On the Caribbean side 
of the central highlands, this movement has produced bitter 
clashes between mestizo pioneers and Miskito and Sumu agri- 
culturalists over what the indigenous people regard as commu- 
nal lands. 

Within contemporary Caribbean lowlands society, a clear 
ethnic hierarchy exists. The indigenous groups — Miskito, 
Sumu, and Rama — occupy the bottom ranks. These groups are 
the most impoverished, least educated, and generally relegated 
to the least desirable jobs. Above them, at successively higher 
ranks, are recently arrived poor mestizos, Creoles, and a small 
stratum of middle-class mestizos. Prior to 1979, Europeans or 
North Americans, sent to manage foreign-owned enterprises, 
were at the top of the hierarchy. In the mines, Miskito and 
Sumu work at the dangerous, low-wage, underground jobs; 
mestizos and Creoles hold supervisory positions; and foreign- 
ers dominate in the top positions. Also prior to 1979, a special 
niche was occupied by a small group of Chinese immigrants, 
who dominated the commerce of the main coastal towns. 

The demography of the Caribbean lowlands is a subject of 
speculation and controversy. The last census data are from 
1971. Since then, the region has experienced rapid natural 
increase and heavy migration of mestizos from the west. Tradi- 
tionally, the Miskito are recognized as the numerically domi- 
nant group, but that status has been challenged by the mestizo 
influx. In the early 1980s, armed conflict in the region drove 
thousands of Miskito over the Honduran border, but as the vio- 
lence ebbed in the late 1980s, refugees returned. The most 
recent government estimates of the ethnic composition of the 
region are based on data from a 1981 housing survey. 



91 



Nicaragua: A Country Study 



The Sandinista Revolution on the Caribbean Coast 

The Sandinista administration, which enjoyed broad popu- 
lar support in the Pacific region and central highlands during 
the early 1980s, was a political failure in the Caribbean low- 
lands from the beginning. In retrospect, this was hardly 
remarkable. Costenos, who were barely reconciled to their incor- 
poration into Nicaragua, were unlikely to respond enthusiasti- 
cally to bold new initiatives from the west. The Somoza regime 
had presented a low profile in the Caribbean region, physically 
limited to a few National Guard outposts, customs offices in the 
ports, and scattered health and educational facilities; the gov- 
ernment allowed designated village leaders to serve as official 
community contacts. Despite some development policies that 
threatened local interests, the Somoza government was never 
despised on the coast the way it was in the west. Accordingly, 
costeno participation in the 1979 Sandinista revolution was min- 
imal. 

In the early 1980s, the Caribbean region was feeling the 
effects of long-term economic decline, especially in the north. 
The foreign-dominated extractive industries, such as lumber 
and mining, were shrinking, largely as a result of overexploita- 
tion of resources. A few foreign firms departed in the wake of 
the Sandinista victory or were expropriated by the new govern- 
ment. Subsistence agriculture, the traditional economic refuge 
of the Miskito when wage work was unavailable, became less 
secure as a result of growing land pressures. Increasing popula- 
tion, land competition with westerners on the agricultural fron- 
tier, and an adverse International Court of Justice (ICJ) 
decision settling a border dispute with Honduras all reduced 
the land available to indigenous cultivators in the east. These 
circumstances left costenos convinced that the region's best 
times had passed. 

The Sandinista revolution arrived in the east with a mestizo 
face. Few costenos and, in particular, few indigenous people 
filled government and party positions in the Caribbean low- 
lands. The Sandinista cadres sent to the region were generally 
ignorant of the area's cultures and languages and were uncon- 
sciously discriminatory in their attitudes toward costenos. Even 
well-intentioned government initiatives could clash with local 
sensitivities. For example, the expansion of government-sup- 
ported social services threatened the Moravian Church's long- 
established authority in these areas. 



92 



Miskito boy harvesting 
coconuts in eastern 
Nicaragua 
Courtesy Nicaraguan 
Tourism Institute 




Sandinista ideology appealed to class interests and anti- 
American nationalism, sentiments that had less appeal in the 
east than on the western side of the country. Although poor 
mestizos in the west could identify with the "exploited classes," 
costenos were, for very good reasons, more likely to perceive 
themselves as members of oppressed ethnic communities. 
Views that the Sandinistas described as "anti-imperialist" made 
little sense to costenos, who historically had depended on the 
United States and Britain to protect them from Nicaragua, felt 
an affinity with Anglo-American culture, and appreciated for- 
eign investment, which they identified with the region's most 
prosperous eras. These attitudes were reinforced by the anti- 
communist, pro-United States orientation of the Moravian 
Church. 

In early October 1980, Creoles in the southern port city of 
Bluefields staged large-scale anti-Sandinista protests. A more 
serious challenge to Sandinista power, however, was brewing in 
the northeast among the Miskito. Between 1982 and 1984, 
large numbers of Miskito were in open revolt against the gov- 
ernment. Like other Contra forces, the Miskito rebels were 
armed and encouraged by the United States. As the Sandinistas 
later acknowledged, however, their own ethnocentric, heavy- 
handed, and, on occasion, brutal exercise of power on the 

93 



Nicaragua: A Country Study 

Caribbean coast fueled the anger that drove the rebellion. 
Beyond these contemporary circumstances, the Miskito revolt 
reflected the costenos' resentment of "Spanish" rule, of their 
own subordination within the ethnic hierarchy of the Carib- 
bean region, and of the economic decline of the region. 

By 1985 the Sandinista leadership had altered its policies 
toward the Caribbean region. Negotiations with rebel groups 
produced a tense but enduring peace in the region. Broader 
discussions with costeno representatives led to an accord divid- 
ing the area into two autonomous regions. The accord also 
granted the peoples of the region limited rights of self-rule, 
cultural guarantees, and influence over the use of the region's 
natural resources, including land. The accord was written into 
the 1987 constitution and subsequent enabling legislation. 
How the autonomy framework would function in practice 
remained to be determined. Historically, the ruling elites of 
the west have sought to enlarge rather than temper their power 
over the Caribbean region. However, the Sandinista experience 
reinforced ethnic consciousness and political militancy among 
costenos. The peoples of the Caribbean region would in all like- 
lihood be quicker to assert their rights in the future. 

* * * 

The Nicaraguan revolution inspired a sudden outpouring of 
writing about a society that had been largely ignored by stu- 
dents of Latin America. Although these works were overtaken 
by events, even as they were being published in the late 1980s 
and early 1990s, many are still worth consulting. Useful over- 
views include David Close's Nicaragua: Politics, Economics and 
Society, Dennis Gilbert's Sandinistas: The Party and the Revolution, 
Kent Norsworthy's Nicaragua: A Country Guide, Carlos Maria 
Vilas's The Sandinista Revolution, Thomas W. Walker's Nicaragua: 
The Land of Sandino, and the collections edited by Walker, espe- 
cially Nicaragua: The First Five Years and Revolution and Counter- 
revolution in Nicaragua. 

Rural society and agrarian reform are covered in Eduardo 
Baumeister's "Agrarian Reform," Laura Enriquez's Harvesting 
Change: Labor and Agrarian Reform, and Joseph Collins's Nicara- 
gua: What Difference Could a Revolution Make? Food and Farming in 
the New Nicaragua. The religious foment of the 1970s and 1980s 
is the subject of Michael Dodson and Laura Nuzzi O'Shaugh- 
nessy's Nicaragua's Other Revolution, Religious Faith and Political 
Struggle, Giulio Giraldi's Faith and Revolution in Nicaragua, 



94 



The Society and Its Environment 



Roger N. Lancaster's Thanks to God and the Revolution: Popular 
Religion and Class Consciousness in the New Nicaragua, and David 
Stoll's Is Latin America Turning Protestant? The Politics of Evangeli- 
cal Growth. On health and education, see John M. Donahue's 
The Nicaraguan Revolution in Health, Richard Garfield and Glen 
Williams's Health and Revolution, and Robert F. Arnove's Educa- 
tion and Revolution in Nicaragua. The lives of Nicaraguan 
women are examined in Women and Revolution in Nicaragua, 
edited by Helen Collinson and Lucinda Broadbent, and Patri- 
cia M. Chuchryk's "Women in the Revolution." The Caribbean 
region and its peoples and conflicts are described in Carlos 
Vilas's State, Class, and Ethnicity in Nicaragua. On the physical 
and human geography of Nicaragua, see Robert West and John 
R Augelli's Middle America. Nicaraguan population trends are 
recorded in the United Nations' Boletin Demo graft co. For short, 
fact-laden updates on varied aspects of Nicaragua society, see 
the English-language monthly Envio. 

For further reading suggestions, see the exhaustive anno- 
tated bibliography, Sandinista Nicaragua, by Neil Snarr, particu- 
larly the chapters on the social sector, religion, the Caribbean 
coast, and the economy. (For further information and com- 
plete citations, see Bibliography.) 



95 



Chapter 3. The Economy 




Worker harvesting coffee beans 



THE NICARAGUAN ECONOMY has seen no "business as 
usual" for almost twenty years. From the mid-1940s to the mid- 
1970s, high rates of growth and investment changed Nicara- 
gua's economy from a traditional agrarian economy dependent 
on one crop to one with a diversified agricultural sector and a 
nascent manufacturing component. Beginning in the late 
1970s, however, more than a decade and a half of civil war, cou- 
pled with a decade of populist economic policies, severely dis- 
rupted the Nicaraguan economy. Extraordinary expenses to 
support the constant fighting, with its incalculable burden 
upon the population, the environment, and the country's 
infrastructure, rendered most economic indicators largely 
meaningless. Add several catastrophic natural disasters — an 
earthquake in 1972, a hurricane in 1988, and a drought in 
1989 — and five years of a total trade embargo by the United 
States to the effects of the fighting, and it becomes clear why 
Nicaragua in 1993 vied with Haiti and Guyana as the poorest 
country in the Western Hemisphere. 

Finding solutions to address the human costs of Nicaragua's 
wars is the economic challenge facing the government of Presi- 
dent Violeta Barrios de Chamorro. Those human costs are 
numerous: the diversion of resources from social programs to 
the military, loss of agricultural and industrial production, 
increased misery and widespread hunger, destruction of natu- 
ral resources and infrastructure, the uprooting of families and 
communities, and demands for land and resources from inter- 
nal and returning external refugees. Getting Nicaragua's 
national economy in order may be the easier part of the chal- 
lenge. Controlling inflation, adjusting exchange rates, and set- 
ting new agricultural and industrial prices and priorities are 
only first steps. The government faces the even larger problems 
of endemic poverty and widening environmental deterioration. 

The February 1990 election of a politically moderate presi- 
dent and the reconciliation of most armed conflict soon after 
seemed to offer a rare opportunity for Nicaragua to build 
almost from scratch a better future. However, continued politi- 
cal problems and natural disasters in 1991 and 1992 dimmed 
the initial optimism. The goal of revitalizing Nicaragua's econ- 
omy in an era of fragile democracy and increasingly scarce 
resources remained the country's greatest problem in 1993. 



99 



Nicaragua: A Country Study 



Historical Background 

Pre-Columbian and Colonial Era 

The first Spanish explorers of Nicaragua found a well-devel- 
oped agrarian society in the central highlands and Pacific low- 
lands. The rich volcanic soils produced a wide array of 
products, including beans, peppers, corn, cocoa, and cassava 
(manioc). Agricultural land was held communally, and each 
community had a central marketplace for trading and distrib- 
uting food. 

The arrival of the Spanish in the early 1500s destroyed, for 
all intents and purposes, the indigenous agricultural system. 
The early conquistadors were interested primarily in gold; 
European diseases and forced work in the gold mines deci- 
mated the native population. Some small areas continued to be 
cultivated at the end of the 1500s, but most previously tilled 
land reverted to jungle. By the early 1600s, cattle raising, culti- 
vation of small amounts of corn and cocoa, and forestry had 
become the major uses for Nicaragua's land. Beef, hides, and 
tallow were the colony's principal exports for the next two and 
a half centuries. 

The Coffee Boom, 1840s-1940s 

Coffee was the product that would change Nicaragua's econ- 
omy. Coffee was first grown domestically as a curiosity in the 
early 1800s. In the late 1840s, however, as coffee's popularity 
grew in North America and Europe, commercial coffee grow- 
ing began in the area around Managua. By the early 1850s, pas- 
sengers crossing Nicaragua en route to California were served 
large quantities of Nicaraguan coffee. The Central American 
coffee boom was in full swing in Nicaragua by the 1870s, and 
large areas in western Nicaragua were cleared and planted with 
coffee trees. 

Unlike traditional cattle raising or subsistence farming, cof- 
fee production required significant capital and large pools of 
labor. Laws were therefore passed to encourage foreign invest- 
ment and allow easy acquisition of land. The Subsidy Laws of 
1879 and 1889 gave planters with large holdings a subsidy of 
US$0.05 per tree. 

By the end of the nineteenth century, the entire economy 
came to resemble what is often referred to as a "banana repub- 
lic" economy — one controlled by foreign interests and a small 



100 



Woman selling hand- 
woven baskets at the 



Managua central market 
Courtesy Nina Seraftno 




domestic elite oriented toward the production of a single agri- 
cultural export. Profits from coffee production flowed abroad 
or to the country's small number of landowners. Taxes on cof- 
fee were virtually nonexistent. The economy was also hostage 
to fluctuations in the price of coffee on the world markets — 
wide swings in coffee prices meant boom or bust years in Nica- 
ragua. 

Diversification and Growth, 1 945-77 

The period after World War II was a time of economic diver- 
sification. The government brought in foreign technocrats to 
give advice on increasing production of new crops; hectarage 
in bananas and sugarcane increased, livestock herds grew, and 
cotton became a new export crop. The demand for cotton dur- 
ing the Korean War (1950-53) caused a rapid increase in cot- 
ton production, and by the mid-1950s, cotton was the nation's 
second largest export-earner, after coffee. 

Economic growth continued in the 1960s, largely as a result 
of industrialization. Under the stimulus of the newly formed 
Central American Common Market (CACM; see Appendix B), 
Nicaragua achieved a certain degree of specialization in pro- 
cessed foods, chemicals, and metal manufacturing. By the end 
of the 1960s, however, import-substitution industrialization 



101 



Nicaragua: A Country Study 

(ISI — see Glossary) as a stimulus for economic growth had 
been exhausted. The 1969 Soccer War between Honduras and 
El Salvador, two members of the CACM, effectively suspended 
attempts at regional integration until 1987, when the Esquipu- 
las II agreement was signed. By 1970 the industrial sector was 
undergoing little additional import substitution, and the col- 
lapse of the CACM meant that Nicaragua's economic growth, 
which had come from the expanding manufacturing sector, 
halted. Furthermore, the manufacturing firms that had devel- 
oped under the tariff protection of the CACM were generally 
high-cost and inefficient; consequently, they were at a disadvan- 
tage when exporting outside the region. 

Although statistics for the period 1970-77 seemed to show 
continued economic growth, they reflected fluctuations in 
demand rather than a continued diversification of the econ- 
omy. The gross domestic product (GDP — see Glossary) rose 13 
percent in 1974, the biggest boom in Nicaragua's economic his- 
tory. However, these figures largely represented the jump in 
construction as the country struggled to rebuild after the disas- 
trous 1972 earthquake. Likewise, the positive growth in 1976- 
77 was merely a reflection of the high world prices for coffee 
and cotton. 

Positive GDP growth rates in the 1970s masked growing 
structural problems in the economy. The 1972 earthquake 
destroyed much of Nicaragua's industrial infrastructure, which 
had been located in Managua. An estimated 10,000 people 
were killed and 30,000 injured, most of them in the capital 
area. The earthquake destroyed most government offices, the 
financial district of Managua, and about 2,500 small shops 
engaged in manufacturing and commercial activities. About 4 
percent of city housing in Managua was left unstable. 

Government budget deficits and inflation were the legacies 
of the earthquake. The government increased expenses to 
finance rebuilding, which primarily benefited the construction 
industry, in which the Somoza family had strong financial inter- 
ests. Because earthquake reconstruction generated few new 
revenues, except through borrowing, most of the resulting 
public deficits were covered by foreign loans. In the late 1970s, 
Nicaragua had the highest level of foreign indebtedness in 
Central America (see Glossary) . 

Most of the benefits of the three decades of growth after 
World War II were concentrated in a few hands. Several groups 
of influential firms and families, most notably the Somoza fam- 



102 



The Economy 



ily, controlled most of the nation's production. The Baname- 
rica Group, an offshoot of the conservative elite of Granada, 
had powerful interests in sugar, rum, cattle, coffee, and retail- 
ing. The Banic Group, so-called because of its ties to the Nica- 
raguan Bank of Industry and Commerce (Banco Nicaraguense 
de Industria y Comercio — Banic), had its roots in the liberal 
families of Leon and had ties to the cotton, coffee, beer, lum- 
ber, construction, and fishing industries. 

The third interest controlling the nation's production was 
the Somoza family, which had wide holdings in almost every 
segment of Nicaraguan society. Financial dealings for the 
Somozas were handled by the Central Bank of Nicaragua 
(Banco Central de Nicaragua), which the Somozas treated as if 
it were a commercial bank. The Central Bank made frequent 
personal loans, which often went unpaid, to the Somozas. 
Although the other financial groups used financial means pri- 
marily to further their interests, the Somozas protected their 
financial interests by controlling the government and its insti- 
tutions. The Somoza family owned an estimated 10 percent to 
20 percent of the country's arable land, was heavily involved in 
the food processing industry, and controlled import-export 
licenses. The Somozas also controlled the transportation indus- 
try by owning outright, or at least having controlling interest 
in, the country's main seaports, the national airline, and Nica- 
ragua's maritime fleet. Much of the profit from these enter- 
prises was then reinvested in real estate holdings throughout 
the United States and Latin America. Some analysts estimated 
that by the mid-1970s, the Somozas owned or controlled 60 
percent of the nation's economic activity. When Anastasio 
Somoza Debayle (president, 1967-72, 1974-79) fled Nicaragua 
in 1979, the family's worth was estimated to be between US$500 
million and US$1.5 billion (see The End of the Anastasio 
Debayle Somoza Era, ch. 1). 

Legacy of the Sandinista Revolution, 1977-79 

By the mid-1970s, the government's economic and dictato- 
rial political policies had alienated nearly all sectors of society 
Armed opposition to the Somoza regimes, which had started as 
a small rural insurrection in the early 1960s, had grown by 1977 
to a full-scale civil war. The righting caused foreign investment 
to drop sharply and the private sector to cut investment plans. 
Many government expenditures were shifted to the military 
budget. As fighting in the cities increased, destruction and 



103 



Nicaragua: A Country Study 

looting caused a large loss in inventories and operating stock. 
Foreign investment, which before 1977 had been a significant 
factor in the economy's growth, almost stopped. As the fighting 
intensified further, most liquid assets flowed out of the country. 

Although the anti-Somoza forces finally won their struggle 
in July 1979, the human and physical cost of the revolution was 
tremendous. As many as 50,000 people lost their lives in the 
fighting, 100,000 were wounded, and 40,000 children were left 
orphans. About US$500 million in physical plants, equipment, 
and materials was destroyed; housing, hospitals, transportation, 
and communications incurred damages of US$80 million. The 
GDP shrank an estimated 25 percent in 1979 alone. 

The Sandinista Era, 1979-90 

The new government, formed in 1979 and dominated by 
the Sandinistas (see Glossary) , resulted in a new model of eco- 
nomic development. The new leadership was conscious of the 
social inequities produced during the previous thirty years of 
unrestricted economic growth and was determined to make 
the country's workers and peasants, the "economically under- 
privileged," the prime beneficiaries of the new society. Conse- 
quently, in 1980 and 1981, unbridled incentives to private 
investment gave way to institutions designed to redistribute 
wealth and income. Private property would continue to be 
allowed, but all land belonging to the Somozas was confiscated. 

However, the ideology of the Sandinistas put the future of 
the private sector and of private ownership of the means of pro- 
duction in doubt. Even though under the new government 
both public and private ownership were accepted, government 
spokespersons occasionally referred to a reconstruction phase 
in the country's development, in which property owners and 
the professional class would be tapped for their managerial 
and technical expertise. After reconstruction and recovery, the 
private sector would give way to expanded public ownership in 
most areas of the economy. Despite such ideas, which repre- 
sented the point of view of a faction of the government, the 
Sandinista government remained officially committed to a 
mixed economy. 

Economic growth was uneven in the 1980s (see table 5, 
Appendix A). Restructuring of the economy and the rebuild- 
ing immediately following the end of the civil war caused the 
GDP to jump about 5 percent in 1980 and 1981. Each year 
from 1984 to 1990, however, showed a drop in the GDP. Rea- 



104 



The Economy 



sons for the contraction included the reluctance of foreign 
banks to offer new loans, the diversion of funds to fight the 
new insurrection against the government, and, after 1985, the 
total embargo on trade with the United States, formerly Nicara- 
gua's largest trading partner. After 1985 the government chose 
to fill the gap between decreasing revenues and mushrooming 
military expenditures by printing large amounts of paper 
money. Inflation skyrocketed, peaking in 1988 at more than 
14,000 percent annually. 

Measures taken by the government to lower inflation were 
largely wiped out by natural disaster. In early 1988, the adminis- 
tration of Daniel Jose Ortega Saavedra (Sandinista junta coor- 
dinator, 1979-85; president, 1985-90) established an austerity 
program to lower inflation. Price controls were tightened, and 
a new currency was introduced. As a result, by August 1988 
inflation had dropped to an annual rate of 240 percent. The 
following month, however, Hurricane Joan cut a devastating 
path directly across the center of the country. Damage was 
extensive, and the government's program of massive spending 
to repair the infrastructure destroyed its anti-inflation mea- 
sures. 

In its eleven years in power, the Sandinista government 
never overcame most of the economic inequalities that it inher- 
ited from the Somoza era. Years of war, policy missteps, natural 
disasters, and the effects of the United States trade embargo all 
hindered economic development. The early economic gains of 
the Sandinistas were wiped out by seven years of sometimes 
precipitous economic decline, and in 1990, by most standards, 
Nicaragua and most Nicaraguans were considerably poorer 
than they were in the 1970s. 

The Chamorro Era, 1 990- 

The economic policies of Violeta Barrios de Chamorro 
(president, 1990- ) were a radical change from those of the 
previous administration. The president proposed to revitalize 
the economy by reactivating the private sector and stimulating 
the export of agricultural products (see fig. 9). However, the 
administration's political base was shaky. The president's politi- 
cal coalition, the National Opposition Union (Union Nacional 
Opositora — UNO), was a group of fourteen parties ranging 
from the far right to the far left. Furthermore, 43 percent of 
the voting electorate had voted for the Sandinistas, reflecting 



105 



Nicaragua: A Country Study 




Source: Based on information from Economist Intelligence Unit, Country Profile: Nica- 
ragua, Costa Eica, Panama, 1991-1992, London, 1992, 14. 

Figure 9. Gross Domestic Product (GDP) by Sector of Origin, 1992 

support for the overall goals of the former administration 
although not necessarily the results. 

The Chamorro government's initial economic package 
embraced a standard International Monetary Fund (IMF — see 
Glossary) and World Bank (see Glossary) set of policy prescrip- 
tions. The IMF demands included instituting measures aimed 
at halting spiraling inflation, lowering the fiscal deficit by 
downsizing the public-sector work force and the military and 
reducing spending for social programs, stabilizing the national 
currency, attracting foreign investment, and encouraging 
exports. This course was an economic path mostly untraveled 
by Nicaragua, still heavily dependent on traditional agro-indus- 
trial exports, exploitation of natural resources, and continued 
foreign assistance. 



106 



The Economy 



Inspired by the IMF, Minister of Finance Francisco Mayo- 
raga quickly put together an economic "Plan of 100 Days." This 
plan, also called the "Mayoraga Plan," cut the deficit and 
helped to lower inflation. Loss of jobs and higher prices under 
the plan, however, also resulted in crippling public- and pri- 
vate-sector strikes throughout the country. Mayoraga's tenure 
in office barely exceeded the 100 days of his economic plan. By 
the end of 1990, the government was forced to abandon most 
of its free-market reforms. 

A series of political problems and natural disasters contin- 
ued to plague the economy in 1991 and 1992. The need to 
accommodate left- and right-wing views within its ruling coali- 
tion and attempts to work with the Sandinista opposition effec- 
tively prevented the implementation of unpopular economic 
measures. The government was unable to lower government 
expenditures or to hold the value of the newly introduced gold 
cordoba (C$o — for value, see Glossary) stable against the 
United States dollar. A severe drought in 1992 decimated the 
principal export crops. In September 1992, a tidal wave struck 
western Nicaragua, leaving thousands homeless. Furthermore, 
foreign aid and investment, on which the Nicaraguan economy 
had depended heavily for growth in the years preceding the 
Sandinista administration, never returned in significant 
amounts. 

Nationalization and the Private Sector 

Nationalization under the Sandinistas 

Despite initial fears that the Sandinista government would 
nationalize the economy as was done in Cuba after the revolu- 
tion, the Sandinista administration pledged to maintain a 
mixed (privately and publicly owned) economy. All property 
and businesses owned by the Somoza family or their associates 
were immediately taken over by the government. Farm workers 
were encouraged to organize under cooperatives on appropri- 
ated land. However, private businesses not previously owned by 
the Somozas were allowed to continue operations, although 
under stringent new government regulations. 

The Sandinista administration held the right to further 
nationalize any industry or land that it deemed was underuti- 
lized or vital to national interests. Exercising this right, the gov- 
ernment made a few "showcase" nationalizations, such as the 
takeover of the Club Terraza, a nightclub in Managua. In gen- 



107 



Nicaragua: A Country Study 




Figure 10. Economic Activity, 1993 



eral, however, nationalization was concentrated in the banking, 
insurance, mining, transportation, and agricultural sectors. 
During the eleven-year tenure of the Sandinistas, the private 
sector's contribution to the GDP remained fairly constant, 
ranging from 50 percent to 60 percent. 

Privatization and the Private Sector 

To win the February 1990 election, Violeta Barrios de 
Chamorro promised to represent all sectors of Nicaraguan 
society, including the small but powerful private sector with 
which she was closely identified. Nicaragua's private sector, 
mostly organized under the Superior Council of Private Enter- 
prise (Consejo Superior de la Empresa Privada — Cosep), was 



108 



The Economy 



instrumental in President Ortega's electoral defeat. Private 
industry had suffered heavy losses during the struggle to over- 
throw the Somoza regime and then fared even worse during 
the decade-long administration of the Sandinistas. 

Nicaragua's private sector also was gravely affected by the 
five-year United States trade embargo directed at destabilizing 
the government of President Ortega. One year after the trade 
embargo began in 1986, the government had already shifted 
much of its economy away from dependence on trade with the 
United States. The private sector, which in 1985 produced 56 
percent of the GDP and 62 percent of Nicaragua's most impor- 
tant exports, suffered from diminished credit and from cost 
increases and delays for essential supplies. 

The private sector had led the political and military opposi- 
tion to the Sandinista government. By election day 1990, the 
Nicaraguan private sector held high expectations that it would 
benefit from a change in government and that it would be 
compensated for the injustices it felt it had suffered during the 
Sandinista years. Privately owned factories and land had been 
confiscated, abandoned, or shuttered or had suffered war dam- 
age during the Sandinista era. Private industry looked to exer- 
cise the political and economic power it had enjoyed under the 
Somoza administrations. The private sector also hoped for a 
return of nationalized property and privatization of govern- 
ment assets still dominated by representatives of the Sandinista 
government. 

In some cases, rehabilitation of the factories and firms 
required only reactivation of idle capacity; other assets, how- 
ever, including both agricultural and industrial machinery, had 
frequently deteriorated beyond repair. In some cases, assets 
had been deliberately destroyed or sold. Much of the Nicara- 
guan private sector remained on the sidelines in 1990, waiting 
for the government to lure it with promises of security for its 
investments and of repair of private property at public 
expense. The Nicaraguan industrial sector showed only a mild 
3 percent recovery by the end of 1990, mostly as the result of 
renewed access to overseas markets (see fig. 10). Threats of 
urban labor unrest, renewed hostilities in the countryside, 
poor infrastructure, political tensions, and delays in passage of 
property laws returning private property to previous owners 
continued to discourage most investment. A leery and still bel- 
ligerent private sector stood ready to turn its political struggle 
against the new Chamorro government and to do battle with 



109 



Nicaragua: A Country Study 

labor unions and other groups identified with the Sandinista 
revolution. 

In 1990 the government initiated a privatization effort to 
transfer more than 100 of Nicaragua's 350 state-owned compa- 
nies to private ownership. The process included the outright 
sale, devolution, or liquidation of assets. The government hold- 
ing company established to privatize state-owned assets initially 
identified forty companies to be sold within six months and an 
additional fifty to be returned to their previous owners or liqui- 
dated at a later date. Industrial workers would later negotiate 
retaining 25 percent ownership of enterprises sold, based on a 
claim of value added, or "sweat equity," during the Sandinista 
period. 

State-owned enterprises contributed about 40 percent of 
the gross national product (GNP — see Glossary) in 1991. Most 
state-owned enterprises were former Somoza properties, 
although some had been confiscated under agrarian reform 
from absentee owners or from the Contras (short for contrarevo- 
lucionarios — see Glossary) . The government also agreed to give 
back 50,000 hectares of fifty-six rural properties provided that 
owners pay for improvements made during the revolution. 
Another 70,000 hectares went to workers, former army officers, 
and demobilized Contras. 

By mid-1992, the government of Nicaragua had also 
returned two slaughterhouses to their previous owners and 
sold a third. The government privatization company tendered 
bids for the administration of two of the largest shrimp process- 
ing plants in the country, one located in Corn Island and the 
other in Bluefields. A bid was also sought for the sale of a ship 
manufacturing and maintenance plant in Bluefields. 

The Issue of Land Ownership 

The expropriation of lands owned by the Somozas in 1979 
left the new Sandinista administration holding about 20 per- 
cent of the country's arable lands. At first, these holdings were 
turned into state farms. In 1981 the administration passed the 
Agrarian Reform Law defining the process of nationalization 
and stating what could be done with expropriated land. The 
law guaranteed property rights to those who continued to use 
their property, but land that was underdeveloped or aban- 
doned was subject to expropriation. Land could also be 
declared necessary for agrarian reform and purchased from its 
owners at a price set by the government. The Agrarian Reform 



110 



The Economy 



Law gave free title to land, mostly in eastern Nicaragua, that 
was occupied by homesteaders. Bank foreclosures in the event 
of default on a bank loan were prohibited. 

Farmland that had been bought or expropriated could be 
turned over to agricultural cooperatives. The farmers who con- 
stituted a cooperative were then given title to the land. These 
"agrarian reform" titles could be inherited, but the title or any 
part of the land could not be sold. The process of turning state 
farms into cooperatives with the transfer of title began slowly at 
first. The process picked up steam in 1984 when rumors began 
circulating that the government would use a lack of clear title 
on state farms as an excuse to remove farmers from state farms. 
In 1985 it was estimated that 120,000 families were farming 
lands redistributed by the Agrarian Reform Law, half on state 
farms and half in cooperatives. 

In its last months in office, the Ortega government awarded 
additional land to Sandinista supporters as payment for gov- 
ernment service. Nicknamed the Pinata, after a children's 
game in which a hollow papier-mache animal filled with candy 
is broken open and the candy falls out, the property giveaway 
consisted of more than 5,000 houses and hundreds of thou- 
sands of hectares of land. 

The new administration of President Chamorro promised 
to compensate the large landowners whose land had been 
taken over by the Sandinista government. President Chamorro 
also issued two controversial land decrees: one provided for 
temporary rental of idle state farmland to those willing to work 
the land for a year, and another established a commission to 
adjudicate more than 1,600 claims on land confiscated by the 
former government. Bank foreclosures were allowed again, 
and the government indicated that it favored changing the 
titling provision of the Agrarian Reform Law to allow for sale of 
property. 

Combined opposition forces would soon force the 
Chamorro administration to ease some of its new policies. The 
critical issue of land ownership would, in fact, prove to be the 
most contentious issue confronting the new government. The 
Sandinista-led opposition derided the rental decree, which pri- 
marily benefited former Contras, as a return of land to sup- 
porters of the Somoza family. Threatened by a major strike, 
President Chamorro agreed to suspend the rental land decree. 
Former President Ortega called the revocation of the decree a 
major victory, while critics assailed it as an abrogation of power. 



Ill 



Nicaragua: A Country Study 

Because Chamorro's plan did not take back property given 
away in the Pinata, the powerful private-sector umbrella group, 
Cosep, refused to participate in her economic plan. Hence- 
forth, Nicaragua's private sector would prove to be an intracta- 
ble opponent. 

Finance 
Banking 

Prior to 1979, Nicaragua's banking system consisted of the 
Central Bank of Nicaragua and several domestic- and foreign- 
owned commercial banks. One of the first acts of the Sandi- 
nista government in 1979 was to nationalize the domestic 
banks. Foreign banks were allowed to continue their opera- 
tions but could no longer accept local deposits. In 1985 a new 
decree loosened state control of the banking system by allow- 
ing the establishment of privately owned local exchange 
houses. 

In 1990 the National Assembly passed legislation permitting 
private banks to resume operations. In 1992 the largest state- 
owned commercial bank was the National Development Bank 
(Banco Nacional de Desarrollo — BND), originally established 
by Chase National Bank. Other state-owned commercial banks 
were the Bank of America (Banco de America — Bamer) and 
the Nicaraguan Bank of Industry and Commerce (Banco Nica- 
raguense de Industriay Comercio — Banic). The People's Bank 
(Banco Popular) specialized in business loans, and the Real 
Estate Bank (Banco Inmobilario — Bin) provided loans for 
housing. Three foreign banks continued operations: Bank of 
America, Citibank, and Lloyds Bank. 

The Inter-American Development Bank (IDB) was instru- 
mental in restructuring Nicaragua's technically bankrupt bank- 
ing sector. In December 1991, the IDB approved a US$3 
million technical cooperation grant to restructure the Central 
Bank, and in March 1992 it approved a US$3 million loan to a 
new commercial bank, the Mercantile Bank (Banco Mercantil) . 
The Mercantile Bank program was expected to make loans 
available to small- and medium-sized private-sector enterprises 
and to finance investments to bolster fixed assets and create 
permanent working capital. The Mercantile Bank was the first 
private bank to be established in Nicaragua since 1979. Three 
additional new commercial banks were scheduled to open in 
1992. 



112 



The Economy 



Restructuring of the National Financial System (Sistema 
Financiero Nacional — SFN) was one of the key elements of the 
government's economic reform program. According to an 
agreement between President Chamorro and the World Bank, 
Banic was to be merged with Bin. The BND would handle only 
rural credit operations, and the People's Bank was to take over 
all credit operations for small- and medium-sized industry. 
International operations, which had been managed exclusively 
by the Central Bank since 1984, were transferred to the BND 
and Banic. The Central Bank would continue to handle opera- 
tions pertaining to the central government, while the newly 
merged banks would be responsible for letters of credit, 
imports, transfers, and dollar checking accounts. 

The Central Bank also auctioned off one of the govern- 
ment's largest exchange houses. This exchange house had 
been established in 1988 under the direction of the Financial 
Corporation of Nicaragua (Corporation Financiera de Nicara- 
gua — Corfin). In 1989 the Central Bank authorized the 
exchange house to operate a foreign money exchange office as 
an agent of the bank. In May 1991, Corfin voted to turn over its 
shares in the exchange house to the Central Bank so that the 
exchange house could be sold. 

Opponents charged that this sale was unconstitutional. 
They argued that the exchange house was the property of the 
Central Bank and could not be transferred. The Federation of 
Bank Workers also charged that the new government banking 
policy was weakening the state bank while giving the advantage 
to the private banks. 

Currency 

From 1912 to 1988, the cordoba was the basic unit of cur- 
rency. Relatively stable during most of that period, the value of 
the cordoba was pegged to the United States dollar. One of the 
last economic decisions by the Somoza administration was a 
devaluation in April 1979 of the cordoba from US$1 = C$7 to 
US$1 = C$10, a value it held until 1985. 

In 1985 mounting economic problems, especially the impo- 
sition of the trade embargo by the United States, forced the 
Ortega administration to opt for a multitiered exchange rate, 
with one rate for petroleum imports, one for agricultural 
goods, one for capital goods, and another used at government 
exchange houses. Amid this confusion, a black market sprang 
up offering significantly more cordobas per dollar than any of 



113 



Nicaragua: A Country Study 

the official government rates. As inflation increased from 1985 
through 1988, the value of the cordoba plummeted, and by 
mid-1988 the government exchange houses offered US$1 = 
C$20,000, while a United States dollar on the black market 
fetched 60,000 cordobas. 

To curb hyperinflation, the government introduced its eco- 
nomic shock program in February 1988. Currency stabilization 
was an integral part of this package, and a new currency, the 
new cordoba (C$n — for value, see Glossary), was introduced. 
Each new cordoba equaled 1,000 old cordobas, and the new 
currency's exchange rate was set at US$1 = C$nl0. By the end 
of 1988, however, the rate at government exchange houses had 
dropped to US$1 = C$n920. 

Devaluation accelerated in 1989 and 1990. Immediately 
after the 1990 elections, the currency lost four-fifths of its 
value. By the end of 1990, it took 3.2 million new cordobas to 
buy a United States dollar on the black market. The govern- 
ment was unable to print money in large enough denomina- 
tions to make simple transactions convenient. 

To help control inflation, the Chamorro government intro- 
duced a third currency, the gold cordoba (C$o), in mid-1990. 
At first used only as an accounting device, this new currency 
was introduced gradually to the general populace, and for six 
months both currencies were legal tender, with a conversion 
rate of 5 million new cordobas to one gold cordoba. After April 
31, 1991, the gold cordoba became the sole legal currency and 
was pegged to the United States dollar at a rate of US$1 = 
C$o5, a rate it maintained throughout 1992. By July 1993, the 
exchange rate had slipped only slightly, to US$1 = C$o6.15. 

Inflation 

In the first half of the 1980s, the annual inflation rate aver- 
aged 30 percent. After the United States imposed a trade 
embargo in 1985, Nicaragua's inflation rate rose dramatically. 
The 1985 annual rate of 220 percent tripled the following year 
and skyrocketed to more than 14,000 percent in 1988, the 
highest rate for any country in the Western Hemisphere in that 
year. An economic austerity plan introduced in late 1988 
caused the 1989 figure to drop somewhat, but inflation jumped 
again in 1990 to more than 12,000 percent. President 
Chamorro's economic plan and the resumption of trade with 
the United States had a positive effect on the country's infla- 
tion. Despite the abandonment of many of the points of the 



114 



The Economy 



economic plan, the annual inflation rate dropped to 400 per- 
cent in 1991, and was estimated to be only 10 percent in 1992. 

Tax Reform 

The Chamorro government instituted tax reform in July 
1990. New measures included lower tariff rates, lower income 
tax, and payment of tax in gold cordobas. The reform reduced 
top tariff rates from 61 percent to 20 percent and top income 
tax from 60 percent to 38.5 percent. Collection of tax may have 
increased because of reduced evasion, but tax revenues, 
reported to be 23.5 percent of GDP in 1989, fell to only 15 per- 
cent by 1990. 

To encourage investment, the government eliminated a 2 
percent export tax on coffee and cotton and lowered the gen- 
eral sales tax from 15 percent to 10 percent. The government 
also granted tax incentives for exporters of nontraditional 
products under a new export-promotion act. Like previous gov- 
ernments, the Chamorro administration announced it would 
extend preferential long-term credit for agro-industrial devel- 
opment. 

Deficits 

Nicaragua's budget deficits were low in the decades of eco- 
nomic growth following World War II. This situation changed 
dramatically in the late 1970s when the Somoza government 
had to borrow large amounts of capital to finance military 
expenditures in the civil war. Deficits also increased during the 
Sandinista years because large sums of money were diverted to 
social programs even as income from traditional export crops 
decreased. The deficit in the final years of the Sandinista 
administration showed an eerie parallel to the final Somoza 
years because the government had to increase finances for the 
military in order to prevent the government's overthrow. 

In 1990, despite a new administration, all sources of govern- 
ment revenue declined. Even without the drain of war, the Cen- 
tral Bank of Nicaragua projected in early 1990 that the fiscal 
deficit for 1990 would average US$13 million per month. 
Shortly after the inauguration of President Chamorro in 1990, 
the government's monthly deficit fell from more than US$30 
million to about US$8 million. The improvement in finances 
was temporary, however, as the government was forced to aban- 
don tight budgetary restraints later in 1990 when it paid large 
sums in severance pay to reduce the number of military and 



115 



Nicaragua: A Country Study 

public-sector employees. Former members of the military, Con- 
tras, and public-sector workers were offered "golden para- 
chutes" in return for retirement. Altogether, the Chamorro 
government spent approximately US$5 million to disarm 
17,000 former combatants. The average payoff was US$200 per 
person and US$1,000 for each weapon that was turned over to 
the government. A few former military leaders from both sides 
of the conflict may have received as much as US$150,000 each, 
according to stories reported in the international press. These 
former leaders also received promises of land, credit, houses, 
and vehicles. 

External Sector 

Foreign Trade and the Balance of Payments 

In 1992 Nicaragua's foreign trade consisted almost entirely 
of agricultural exports (mostly coffee, cotton, bananas, sugar, 
and beef) and imports of petroleum, consumer goods, and 
machinery. Although the country's major trading partners 
have changed in response to the political orientation of the 
administration in power and the trade balance has fluctuated 
with the world price for agricultural products, Nicaragua's 
basic pattern of imports and exports has remained unchanged 
throughout the twentieth century. 

The late 1970s and 1980s saw the country's trading partners 
shift dramatically (see table 6, Appendix A). Prior to the out- 
break of large-scale fighting in 1977, the country's main trad- 
ing partner was the United States. The period of widespread 
hostilities from 1977 to 1979, along with dwindling worldwide 
support for the Somoza administration, halted almost all for- 
eign trade. When peace returned in 1979, the new Sandinista 
government encouraged trade with the Soviet Union, Cuba, 
and Eastern Europe. This shift in trading partners gathered 
momentum in the 1980s when the United States trade 
embargo forced the Sandinista administration to strengthen 
ties with socialist countries. Nicaraguan exports to Soviet bloc 
countries went from nil in 1979 to 31 percent in 1987; in the 
same time period, imports from socialist nations rose from less 
than 1 percent to more than 44 percent. 

As trade with the socialist countries increased, trade with 
the United States and neighboring Central American countries 
decreased. The growth of the Contra insurgency in border 
areas made overland trade to Nicaragua's neighbors difficult. 



116 



The Economy 



The disruption of trade routes, along with political opposition 
to the Sandinista government by the other Central American 
republics, caused trade between Nicaragua and the rest of Cen- 
tral America to decline 75 percent from 1982 to 1985. Trade 
with the United States in the 1980s also fell. In 1983 the United 
States lowered the sugar import quota from Nicaragua, and 
sugar exports from Nicaragua to the United States declined 90 
percent. The 1985 United States embargo on trade with Nica- 
ragua ended what exchange was left between the two nations; 
the United States accounted for 23 percent of Nicaraguan 
exports and 31 percent of Nicaraguan imports in 1980; trade 
between the two was practically nonexistent after 1985. 

The change of administrations in Nicaragua in 1990, along 
with the overthrow of communism in Eastern Europe and the 
Soviet Union and the collapse of the Cuban economy, caused 
Nicaraguan trade patterns to shift yet again. Trade with Cuba, 
Russia, and Eastern Europe plummeted. The end of the 
United States trade embargo in 1990 resulted in 16.4 percent 
of Nicaragua's exports going to the United States and 21.3 per- 
cent of Nicaragua's total foreign purchases coming from the 
United States in the following year. 

Nicaragua's balance of trade has shown a sizable deficit 
every year since 1980. Export income declined in the 1980s 
because of poor harvests, low prices for agriculture exports, dif- 
ficulty in obtaining foreign credits and foreign exchange, the 
decline of the Central American Common Market (CACM) as 
a trading bloc, and the loss of United States markets. Despite a 
decrease in export earnings, imports of petroleum and con- 
sumer goods continued at roughly the same pace throughout 
the 1980s. The yearly trade balance for that decade ranged 
from US$230 million to US$562 million (in constant 1980 
United States dollars), and the negative trade balances were 
paid for by a rapid increase in the country's external debt. 
Ironically, resumption of trade with the United States exacer- 
bated the balance of payments situation because imports of 
consumer goods and machinery from the United States 
increased much faster than exports of agricultural products. 

Foreign Aid 

Having won the 1990 elections and made significant steps 
toward peace, the new Chamorro government expected that 
Western nations and financial institutions would rally to its sup- 
port. The United States, however, made resumption of eco- 



117 



Nicaragua: A Country Study 

nomic assistance conditional on steadfast adherence to 
privatization of government-controlled resources, cuts in the 
military, and cancellation of Nicaragua's 1985 damage suit 
against the United States in the International Court of Justice 
(ICJ). Additional requirements for trade and tariff liberaliza- 
tion quickly followed the more general conditions that the 
United States placed on resumption of foreign assistance. 

To enable Nicaragua to meet eligibility requirements for 
borrowing from international financial institutions, the United 
States government promised Nicaragua approximately US$300 
million in 1990. These funds were designated primarily for 
debt repayment and petroleum imports (the country's petro- 
leum bill in 1989 was US$90 million). A smaller portion was 
earmarked for employment generation. However, these prom- 
ised funds would prove slow to come. Two hundred days after 
the inauguration of President Chamorro, only US$160 million 
of the US$300 million pledged by the United States had been 
delivered. 

Conditions for new loans were also placed by international 
banking organizations. In 1991 the IMF approved a US$55.7 
million standby credit over an eighteen-month period to sup- 
port President Chamorro's economic program. Requirements 
for the money, however, were similar to those imposed by the 
United States government and included accelerated privatiza- 
tion. 

In July 1991, President Chamorro signed a US$420 million 
loan with the World Bank and the IDB. Beginning in 1992, 
US$220 million was disbursed for investment in coffee, cotton, 
and cattle and for improvement of damaged and worn infra- 
structure. The remainder was to be used to pay off a bridge 
loan from Colombia, Spain, Venezuela, and Mexico, money 
those countries had loaned Nicaragua to pay a US$360 million 
debt to the World Bank and the IDB. Arrears payments to the 
international financial institutions were a standard condition 
for eligibility for new loans. Nicaragua also received additional 
aid from seventeen other countries to pay off arrears. 

External Debt 

After the Sandinista revolution, first under the provisional 
junta and later under President Ortega, Nicaragua moved from 
a historically high dependence on financing from Western 
nations to financial dependence on the Soviet Union and East- 
ern Europe. By 1990 and the election of President Chamorro, 



118 



The Economy 



Nicaragua was the most indebted country in Central America, 
owing close to US$4 billion to the Soviet Union and another 
US$6 billion to US$8 billion to Western nations and interna- 
tional lending institutions. 

As the result of a de facto moratorium on Somoza-con- 
tracted debt by the Sandinista government, Nicaragua faced 
US$350 million in debt arrears in 1990. This debt was owed 
mostly to international financial institutions, including the 
World Bank, the IMF, and the IDB. New borrowing was pre- 
cluded by the old debt and accumulated arrears. 

The need to overcome the burden of a growing foreign 
debt, estimated at US$10.6 billion, drove the Chamorro gov- 
ernment's economic program in the 1990s. The Nicaraguan 
debt, which was owed mostly to governments and the multilat- 
eral lending institutions, was still the highest per capita debt in 
the region. Despite some debt forgiveness since the inaugura- 
tion of President Chamorro, significant additional debt relief 
remained an absolute necessity for economic recovery. 

Labor 

Composition of the Labor Force 

In 1989 the total labor force consisted of approximately 
1,277,000 persons. Almost one-third of the labor force is made 
up of women, and about one-third of all working-age women 
hold jobs. In general, members of the labor force are relatively 
unskilled and have a high degree of mobility, frequently chang- 
ing jobs or moving to other areas of the country to obtain 
work. Agriculture accounts for more than 30 percent of all 
employment, and workers outside of agriculture are more 
likely to be self-employed in small family-owned enterprises 
than salaried employees of larger concerns. 

Approximately 40,000 new people enter the Nicaraguan 
labor force each year. Throughout the 1980s, many Nicaraguan 
workers were diverted from productive economic activities to 
the war effort. The 1990 demobilization of the military, how- 
ever, added 50,000 persons to the work force. 

Nicaragua entered the 1980s with a severe scarcity of skilled 
labor, especially technicians and other professionals. A "brain 
drain" — more than half a million professionals moved out of 
the country during the Sandinista era — further robbed the 
country of the expertise needed to staff its institutions. As 
many as 70 percent of Nicaraguan graduates with a master's 



119 



Nicaragua: A Country Study 

degree in business administration were estimated to be in self- 
imposed exile in 1990. 

Employment Conditions 

Conditions of work are covered by several labor laws and are 
also spelled out by articles in the 1987 Nicaraguan constitution. 
The constitution specifies no more than an eight-hour workday 
in a forty-eight-hour (six-day) work week, with an hour of rest 
each day. Health and safety standards are also provided for by 
the constitution, and forced labor is prohibited. 

The Labor Code of 1945, patterned after Mexican labor 
laws, was Nicaragua's first major labor legislation. Provisions of 
the code prohibited more than three hours of overtime, three 
times a week. Workers were entitled to fifteen days of vacation 
annually (eight national holidays and seven saint's days). The 
Nicaraguan social security program, passed in 1957, enumer- 
ates workers' benefits, including maternity, medical, death, and 
survivors' benefits; pensions; and workers' compensation for 
disability. 

The constitution provides for the right to bargain collec- 
tively. In addition, the Labor Code of 1945 was amended in 
1962 to allow for sympathy strikes, time off with pay when a 
worker has been given notice of an impending layoff, and the 
right to claim unused vacation pay when terminated. The mini- 
mum age for employment is fourteen, but the Ministry of 
Labor, which has the responsibility of enforcing labor laws, 
rarely prosecutes violations of the minimum-age regulation; 
young street vendors or windshield cleaners are a common 
sight in Managua, and children frequently work on family 
farms at a young age. 

A National Minimum Wage Commission establishes mini- 
mum wages for different sectors of the economy. Enforcement 
of the minimum wage is lax, however, and many workers are 
paid less than the law allows. Labor groups have argued that 
the minimum wage is inadequate to feed a family of four, and 
in 1992 the country's largest umbrella group of unions issued a 
statement demanding that the government index the mini- 
mum wage to the cost of living. 

Organized Labor 

All public- and private-sector workers, except the military 
and the police, are entitled to join a union. The estimate of the 
number of workers in unions varies considerably, but some 



120 



Much of the labor force ekes out an existence in the informal sector. 

Market scene, Managua 
Courtesy Nina Serafino 



121 



Nicaragua: A Country Study 

labor leaders place the number as high as 50 percent. Unions 
are required to register with the Ministry of Labor and must be 
granted legal status before they can bargain collectively; how- 
ever, some labor groups complain of intentional delays in this 
legalization process. Unions are allowed to associate freely with 
each other or with international labor organizations. 

The country's two largest unions, the Sandinista Workers' 
Federation (Central Sandinista de Trabajadores — CST) and 
the Association of Agricultural Workers (Asociacion de Traba- 
jadores del Campo — ATC), are associated with the Sandinista 
political party and are also a part of the umbrella group for all 
Sandinista unions, the National Workers' Front (Frente Natio- 
nal de Trabajadores — FNT). Three smaller unions, the Gene- 
ral Confederation of Workers-Independent (Confederation 
General de Trabajadores Independiente — CGT-I), the Federa- 
tion for Trade Union Action and Unity (Central de Action y 
Unidad Sindical — CAUS), and the Workers' Front (Frente 
Obrero — FO), are affiliated with leftist political parties. The 
Social Christian Workers' Front (Frente de Trabajadores Social- 
cristianos — FTS) has ties with the Nicaraguan Social Christian 
Party (Partido Social Cristiano Nicaraguense — PSCN). Workers 
in various sectors of the economy, including health care, trans- 
portation, coffee, livestock, and agriculture, have their own 
unions. 

Unemployment and Underemployment 

Reliable labor statistics are difficult to obtain, but nearly half 
of Nicaragua's work force was estimated to be unemployed or 
underemployed in 1990. Many Nicaraguan workers eke out 
speculative incomes in the burgeoning informal sector, which 
encompasses about 55 percent of the economically active pop- 
ulation. After several years of hyperinflation in the late 1980s 
had eroded conventional salaries, thousands of Nicaraguans 
chose to cast their lot as black marketeers, street vendors, taxi- 
cab drivers, and other persons earning their livings on the 
streets. Almost everyone sought some means to augment or 
replace inflation-ruined salaries. 

Wages 

As fixed salaries became increasingly meaningless in the late 
1980s, high annual turnover, as much as 100 percent for urban 
industrial workers, was also typical of the Nicaraguan labor 
force. By 1988 real wages in Nicaragua were less than one-tenth 



122 



The Economy 



of those in 1980, reflecting the impoverishment of the middle 
class as well as increasing numbers of the poor. Nonwage incen- 
tives instituted by the Sandinista government in the early 1980s 
for public-sector workers were abandoned during the period of 
extreme economic adjustment of the late 1980s. By inaugura- 
tion day 1990, it was not uncommon for skilled office workers 
to earn the equivalent of US$10 per month, augmented in 
some cases by dollar-denominated bonuses for workers in the 
private sector. 

Labor Unrest 

By 1990 labor unrest was rampant. Urban workers vied with 
their rural counterparts to protest deteriorating economic con- 
ditions. The workers' protests, however, were soon drowned out 
by demands by the business class for government trade subsi- 
dies, preferential investment, and credit, particularly in the his- 
torically dominant agricultural sector. Drought in several food- 
producing areas in 1990 decreased the amount of food avail- 
able, increased prices, and exacerbated already severe poverty. 
In addition, as many as 500,000 refugees returned to Nicara- 
gua, including thousands of former Contras. They, along with 
thousands of former private- and public-sector workers, further 
swelled the ranks of the unemployed and underemployed, and 
increased the burden of grievances with which the new govern- 
ment had to deal. 

One of the most troublesome problems for the Chamorro 
government was ongoing support for the Sandinista revolu- 
tionary ideals from a large segment of the population and high 
expectations for government help to address the needy. The 
Sandinista administration had permanently altered the 
"psyche" of the Nicaraguan poor. From inauguration day 
onward, President Chamorro was confronted by a strike-ready 
labor force motivated by pressing needs and a suspicious, foot- 
dragging private sector. 

Industry 

Historically, Nicaragua's small industrial sector has consisted 
primarily of food processing. Except for one cement plant and 
one petroleum refinery, agro-processing industries (slaughter- 
houses, meat packing plants, food processing plants, cooking 
oil plants, and dairy facilities) and the manufacture of animal 
by-products (candles, soap, and leather) have been the back- 



123 



Nicaragua: A Country Study 

bone of Nicaragua's urban industry. The 1960s were a period of 
rapid growth of the industrial sector, as new external tariffs 
established by the CACM allowed the growth of import-substi- 
tution plants in Nicaragua. Formation of new import-substitu- 
tion plants slowed in the 1970s, however, and the percentage of 
GDP derived from industry dropped to only 23 percent in 
1978. 

Political and economic problems caused the industrial sec- 
tor to shrink in the years after 1978. The civil war caused manu- 
facturing output to decrease by one-quarter in 1979 alone. In 
the agro-industries, which represented 75 percent of the total 
industrial output, idle capacity became a serious problem after 
the Sandinista victory in 1979. In the early 1980s, food process- 
ing plants were operating at only 50 percent capacity; sugar 
mills, 49 percent capacity; animal feed processing plants, 70 
percent capacity; fruit canning plants, 94 percent capacity; and 
vegetable oil refineries, 42 percent capacity. The Sandinista 
government maintained a monopoly on beef processing facili- 
ties, but here, too, idle capacity rose from 30 percent in the 
period between 1977 and 1979 to 85 percent by 1981. Idle 
capacity in the beef cattle industry averaged 60 percent in sub- 
sequent years. This phenomenon resulted mainly from clan- 
destine slaughterhouses, an illegal network of beef distributors, 
and the withholding of food products by producers. 

Although the government-controlled distribution system 
created shortages, a black market thrived for milk, cheese, 
chicken, and eggs, as well as livestock by-products such as soap 
and shoes. In the mid-1980s, Black-market prices soared, and 
essentials became next to impossible to obtain through legiti- 
mate channels. As basic grains and other food became scarcer, 
beef consumption in Nicaragua rose to the highest level in 
Central America. Unable to buy corn, Nicaraguans ate beef. 
Immediately before the imposition of the United States trade 
embargo in 1985, many ranchers instituted the wholesale 
slaughter of beef and dairy cows that they were unable to shift 
across the borders to Costa Rica or Honduras. 

The industrial sector, which had grown only sporadically in 
the early 1980s, declined in the mid- to late 1980s as the Contra 
war escalated and United States markets dried up. Industrial 
production dropped an average of 5 percent each year from 
1984 to 1989. By 1989 the industrial sector contributed only 19 
percent to the nation's GDP, and construction accounted for 
only 4 percent. 



124 



Worker harvesting 
tomatoes 
Courtesy Nicaraguan 
Tourism Institute 



By President Chamorro's inauguration in 1990, only about 
10 percent of the pre-Sandinista era work force was still 
employed in the skeletal industrial sector. A few larger-scale 
industries, including a cement production plant, a chemical 
plant, a metals processing plant, and a petroleum refinery, 
were geared toward domestic consumption. Even these suf- 
fered badly from shortages of essential imports and the lack of 
skilled labor, however. 

Agriculture 

Ironies abound in Nicaragua's historically dominant agricul- 
tural sector. The country's relatively low population density and 
its wealth of land resources have both held the promise of solu- 
tions to poverty and been a major cause of it. The importance 
of one or two crops has meant that the country's entire econ- 
omy has undergone boom-or-bust cycles determined primarily 
by worldwide prices for agricultural exports. 

Coffee became the country's principal crop in the 1870s, a 
position it still held in 1992 despite the growing importance of 
other crops. Cotton gained importance in the late 1940s, and 
in 1992 was the second biggest export earner. In the early 
1900s, Nicaraguan governments were reluctant to give conces- 
sions to the large United States banana companies, and 



125 



Nicaragua: A Country Study 

bananas have never been as important a crop for Nicaragua as 
they have been for Nicaragua's Central American neighbors; 
bananas are grown in the country, however, and were generally 
the third largest export earner in the post-World War II period. 
Beef and animal by-products, the most important agricultural 
export for the three centuries before the coffee boom of the 
late 1800s, were still important commodities in 1992 (see table 
7, Appendix A) . 

From the end of World War II to the early 1960s, the growth 
and diversification of the agricultural sector drove the nation's 
economic expansion. From the early 1960s until the increased 
fighting in 1977 caused by the Sandinista revolution, agricul- 
ture remained a robust and significant part of the economy, 
although its growth slowed somewhat in comparison with the 
previous postwar decades. Statistics for the next fifteen years, 
however, show stagnation and then a drop in agricultural pro- 
duction. 

The agricultural sector declined precipitously in the 1980s. 
Until the late 1970s, Nicaragua's agricultural export system 
generated 40 percent of the country's GDP, 60 percent of 
national employment, and 80 percent of foreign exchange 
earnings. Throughout the 1980s, the Contras destroyed or dis- 
rupted coffee harvests as well as other key income-generating 
crops. Private industry stopped investing in agriculture because 
of uncertain returns. Land was taken out of production of 
export crops to expand plantings of basic grain. Many coffee 
plants succumbed to disease. 

In 1989, the fifth successive year of decline, farm produc- 
tion declined by roughly 7 percent in comparison with the pre- 
vious year. Production of basic grains fell as a result of 
Hurricane Joan in 1988 and a drought in 1989. By 1990 agricul- 
tural exports had declined to less than half the level of 1978. 
The only bright spot was the production of nontraditional 
export crops such as sesame, tobacco, and African palm oil. 

Agricultural Policy 

In 1979 the new Sandinista administration quickly identi- 
fied food as a national priority so that the country's chronically 
malnourished rural population could be fed. The government 
planned to increase production to attain self-sufficiency in 
grains by 1990. Self-sufficiency in other dietary necessities was 
planned for the year 2000. For a variety of reasons, however, 
including the private sector's retention of 60 percent of arable 



126 



The Economy 



land, the Sandinista government continued to import food and 
grow cash crops. In 1993 the goal of self-sufficiency in food pro- 
duction was still far from being achieved. 

To generate essential foreign exchange, the Ortega adminis- 
tration continued to support an upscale, high-tech agroexport 
sector, but returns on its investment diminished. By 1990 only 
one-quarter of the pre-1979 hectarage planted in cotton, one 
of the leading foreign exchange earners in the 1970s, was still 
under cultivation. Despite an established priority for food pro- 
duction, food imports to Nicaragua grew enormously from the 
mid-1970s to the mid-1980s. 

In general, the Sandinistas made little progress in reducing 
economic dependence on traditional export crops (see table 8, 
Appendix A). To the contrary, faced with the need for food 
self-sufficiency versus the need for essential foreign exchange 
earnings, the Ortega administration, demonstrating scant eco- 
nomic expertise, continued to prop up the country's tradi- 
tional agro-industrial export system. They did so despite 
expensive foreign imports, diminished export markets, and a 
powerful opposing private sector. However, revenues from tra- 
ditional export crops continued their rapid decline through- 
out the 1980s. Despite this drop, agriculture accounted for 29 
percent of the GDP in 1989 and an estimated 24 percent in 
1991. Agriculture still employed about 45 percent of the work 
force in 1991. 

Crops 

Coffee 

Large-scale coffee growing began in Nicaragua in the 1850s, 
and by 1870 coffee was the principal export crop, a position it 
held for the next century. Coffee is a demanding crop, how- 
ever. Coffee trees require several years to produce a harvest, 
and the entire production process requires a greater commit- 
ment of capital, labor, and land than do many other crops. Cof- 
fee also grows only in the rich volcanic soil found on 
mountainous terrain, making transportation of the crop to 
market difficult. 

In 1992 more land was planted in coffee than in any other 
crop. The actual amount of land devoted to coffee varies some- 
what from year to year, but averaged 210,000 hectares in the 
1980s. Production is centered in the northern part of the cen- 
tral highlands north and east of Esteli, and also in the hilly vol- 



127 



Nicaragua: A Country Study 



canic region around Jinotepe. Although production of coffee 
dropped somewhat in the late 1980s, the 1989 crop was still 
42,000 tons. Nicaragua's poor transportation system and eco- 
logical concerns over the amount of land devoted to growing 
crops on volcanic slopes in the Pacific region limit further 
expansion of coffee cultivation. These limitations have led 
growers to explore planting other crops in undeveloped areas 
of the country. 

Cotton 

Cotton was Nicaragua's second biggest export earner in the 
1980s. A latecomer to Nicaraguan agriculture, cotton became 
feasible as an export crop only in the 1950s, when pesticides 
were developed that permitted high yields in tropical climates. 
Cotton soon became the crop of choice for large landowners 
along the central Pacific coast. As the amount of land under 
cultivation grew, however, erosion and pollution from the 
heavy use of pesticides became serious problems. Lack of credit 
for planting, a drop in world cotton prices, and competition 
from Chile discouraged cotton production in the mid-1980s. 
Production of cotton dropped significantly in the 1980s, and 
the 1989 crop of 22,000 tons was less than a third of that pro- 
duced in 1985. 

Bananas 

Unlike in other Central American countries, political squab- 
bles over who would control the plantations and shipment of 
the crop prevented bananas from becoming the major export 
earner in Nicaragua. Bananas, a native fruit of tropical Asia, 
were introduced to Nicaragua early in the colonial period. Ini- 
tially, until a market for them appeared in the United States in 
the 1860s, bananas, like other fruit, were destined mostly for 
local consumption. Small plots of the Gros Michael variety of 
banana were planted for export, but political turmoil and diffi- 
culties in establishing secure transportation routes hampered 
export. Because United States companies developed banana 
production in neighboring countries, Nicaragua's large poten- 
tial for this crop remained underdeveloped. 

Politics and outbreaks of disease in the 1900s kept banana 
production low. During their time in power, the Somoza family, 
who had discovered that coffee and cattle were more profitable 
than bananas, refused to give United States banana companies 
the free rein that they enjoyed throughout the rest of Central 



128 





A farmer's cooperative in Esteli 
Courtesy Nina Serafino 
Rice being harvested mechanically 
Courtesy Eugene Robertson 



129 



Nicaragua: A Country Study 

America. In addition, an outbreak of Panama disease, a fungus 
that kills the plant's underground stem, wiped out most of the 
banana plantations in the early 1900s. New plants of the Valery 
and Giant Cavendish variety were planted, but constant use of 
fungicides was required to control black sigatoka disease. 
Although Cavendish bananas yield three times the harvest of 
the older Gros Michael type, Cavendish bananas are more diffi- 
cult to harvest and transport, Cavendish bananas, for example, 
bruise easily and must be picked at an earlier stage and crated 
in the fields for transport. Most banana production is in the 
Pacific lowlands, in a region extending north from Lago de 
Managua to the Golfo de Fonseca. In 1989 banana production 
amounted to 132,000 tons. 

Other Crops 

Although much of lowland Nicaragua has a climate condu- 
cive to growing sugarcane, poor transportation has limited pro- 
duction to roughly the same area in northwest Nicaragua 
where bananas are grown. Most sugarcane is processed into 
whitish centrifugal sugar, the raw sugar of international com- 
merce. Some plants further process the sugarcane into refined 
granulated sugar. Demand for sugar remained comparatively 
low until the United States-imposed embargo on Cuban sugar 
began in 1960. Demand then soared, and sugar production tri- 
pled over in the next two decades. Like all other agricultural 
products, sugar production was severely hit by the United 
States trade embargo on Nicaraguan products from 1985 to 
1990. Production of raw sugarcane stood at 2,300 tons in 1989. 

In the early 1990s, the government attempted to diversify 
agriculture, but had limited results. Tobacco and sesame are 
both produced for export. The first African palm oil planta- 
tions, which were established in the Caribbean lowlands, began 
production in 1990. Beans, corn, rice, and sorghum continue 
to be widely grown and consumed domestically. 

Livestock 

The first cattle were brought to Nicaragua by the Spanish in 
the 1500s, and livestock raising was a mainstay of the early col- 
ony. Drier areas on the western slopes of the central highlands 
are ideal for cattle raising, and by the mid-1 700s, a wealthy 
elite, whose income was based on livestock raising, controlled 
Leon, Nicaragua's colonial capital. In the late 1900s, as was true 
in the late 1500s, cattle raising has been concentrated in the 



130 



The Economy 



areas east of Lago de Managua. Most beef animals are 
improved zebu strains. Smaller herds of dairy cattle — mostly 
Jersey, Guernsey, or Holstein breeds — are found near popula- 
tion centers. From 1979 to 1989, the total number of cattle 
dropped by a third because of widespread smuggling to Hon- 
duras and Costa Rica and illegal slaughter of the animals for 
sale of meat on the black market. 

Natural Resources and Conservation 

Fishing and Forestry 

Although fishing has long been a source of food for the 
domestic market in Nicaragua, the rich fishing grounds of the 
Caribbean began to be exploited for export of shrimp and lob- 
ster only in the 1980s. A 1987 loan by the IDB allowed the 
country to double the size of its fishing fleet to ninety boats. 
However, damage by Hurricane Joan in 1988 to the two pro- 
cessing plants and the United States trade embargo in 1985 
kept production levels far below the potential catch. Restora- 
tion of trade with the United States in 1990 did produce a 
surge in exports, and the government hoped that fishing 
would provide a significant share of export earnings in the 
1990s. 

Nicaragua has extensive forests, and despite the large-scale 
clearing for agricultural use, about one-third of the land, or 
approximately 4 million hectares, was still forested in 1993. 
Most of the forests consist of the tropical rain forests of the 
Caribbean lowlands, where surface transportation is practically 
nonexistent. Hardwoods abound in this region, but the stands 
are mixed with other wood, making exploitation difficult. How- 
ever, some logging of mahogany, cedar, rosewood, and log- 
wood for dyes takes place. In addition, the large stands of pine 
in the northeast support logging and a small plywood industry. 

Mining 

Mining is not an important sector of the Nicaraguan econ- 
omy, although the small amounts of gold and silver that are 
extracted provide much-needed export income. The country's 
two principal gold and silver mines are the Bonanza and the 
Siuna mines, located in northeast Nicaragua about 100 kilome- 
ters west of Puerto Cabezas. A small gold mine, the El Limon 
mine, operates north of Leon. All mines were nationalized by 
the government in 1979, and state control, combined with the 



131 



Nicaragua: A Country Study 

fact that the two largest mines are in areas where the Gontras 
operated, caused production of gold and silver to drop in the 
1980s. The 1988 production figures of 875 kilograms of gold 
and 500 kilograms of silver were less than half the 1983 produc- 
tion figures. Small amounts of copper, lead, and tungsten have 
been mined in the past, and the country has unexploited 
reserves of antimony, tungsten, molybdenum, and phosphate. 

Conservation and the Environment 

Destruction of the Nicaraguan environment stopped briefly 
during the 1980s. The Ortega administration generally did not 
emulate the governments of El Salvador and Guatemala, where 
a scorched-earth policy was used to fight insurgency. In addi- 
tion, the Gontras were usually based across the Honduran and 
Costa Rican borders and did not hold significant territory in 
Nicaragua. The Sandinistas moved 200,000 people out of the 
combat zones, creating huge land tracts where hunting, fish- 
ing, and farming seldom took place. Abandoned agricultural 
lands returned to their natural states, animal life prospered, 
and some forests remained uncut. Hunting was minimal 
because carrying a gun invited disaster. For a short time at 
least, the Contra war had the accidental effect of stopping the 
aggressive exploitation of Nicaragua's natural resources. 

The Sandinista government established the Nicaraguan 
Institute for Natural Resources and Environment (Instituto de 
Recursos Naturales — Irena) in the 1980s to direct environmen- 
tal conservation on a national scale. Irena created Bosawas, a 
1.4-million hectare nature reserve and Central America's larg- 
est protected natural area. The institute also attempted man- 
agement of watersheds, conservation of rainforests, and the 
establishment of windbreaks. In addition, Irena created a 
peace park on the border with Costa Rica. This combination of 
accidental and intentional environmental conservation in the 
early 1980s temporarily delayed the destruction of land associ- 
ated with expanding export agriculture. 

These conservation measures were not permanent, how- 
ever. Like many social programs in health and education, envi- 
ronmental programs established in the early years of the 
Sandinista government soon fell victim to the Contra war. As 
public-sector spending after 1985 increasingly shifted away 
from social programs to defense, early environmental efforts 
were mostly ignored. Hundreds of state farms created by agrar- 
ian reform began to imitate their larger predecessors, expand- 



132 



Fishing boats and small launches at Bluefields on the Caribbean coast 

Courtesy Nicaraguan Tourism Institute 



133 



Nicaragua: A Country Study 

ing agricultural development into previously undeveloped, 
rain forest areas. As poverty increased because of the weaken- 
ing economy, rural dwellers turned more and more to forests 
for fuel wood and supplemental food, thus depleting previ- 
ously abundant stocks. Although in the 1990s Nicaragua's trop- 
ical forests were less than 1 percent the size of the Amazon rain 
forest in Brazil, Nicaraguan rain forests were disappearing at a 
rate ten times faster than were rain forests in the Amazon. If 
that rate continues, the Nicaraguan rain forest will have disap- 
peared by 2010. 

Much of the government's hope for economic recovery has 
remained pinned on exploiting Nicaragua's abundant forest 
resources, casting serious doubt on any success for the coun- 
try's future environmental efforts. In 1991 Equipe de Nicara- 
gua, a Nicaraguan branch of a large Taiwanese firm, was 
granted a logging concession on 375,000 hectares in the Carib- 
bean lowlands. The firm agreed to invest more than US$100 
million in a modern plywood manufacturing facility. As part of 
the deal, the Taiwanese firm offered to help the Nicaraguan 
government in its reforestation efforts in other parts of the 
country. In 1992 the government signed an agreement with 
Equipe de Nicaragua for a large wood-processing plant. 

Mostly as the result of environmentalist opposition to a Tai- 
wanese-inspired forestry project, Irena created a new national 
forest institute to regulate and control the use of the forests. 
The institute received initial financing and support from for- 
eign governments and international organizations for the con- 
servation of the biological reserve named Indio-Maiz. This 
reserve, encompassing 4,500 square kilometers, is located in 
southeast Nicaragua between the Rio San Juan and Rio Punta 
Gorda. Together with the previously existing Bosawas reserve, 
they make up the largest forest reserves in Central America. 

Services 

Most of Nicaragua's physical infrastructure was not devel- 
oped until the 1950s. The Somoza dynasty built roads, rail- 
roads, and telecommunications in order to support the 
growing needs of exporters and of the related urban agro- 
industries in the Pacific lowlands. Although the Sandinista gov- 
ernment improved the road system, much of the central high- 
lands and Caribbean lowlands still remained inaccessible in the 
early 1990s. 



134 



The Economy 



Transportation 

In 1993 Nicaragua had 26,000 kilometers of roads; 4,000 
kilometers were paved, 2,200 kilometers were gravel, and the 
rest were earthen (see fig. 11). The Pan American Highway, 
heavily damaged during the civil war, runs north to south for 
369 kilometers through western Nicaragua, linking Managua 
with Honduras and Costa Rica. A modest system of paved and 
gravel roads connects the populated areas of the Pacific low- 
lands and also smaller cities in the central highlands. In 1993, 
however, eastern Nicaragua remained almost without roads, 
and the primary road to the region from the west stopped at 
Rama short of the Caribbean coast. During the strife of the 
1970s and 1980s, many of the country's bridges and roads dete- 
riorated even further because of fighting and lack of routine 
maintenance. 

Most of Nicaragua's government-owned railroads are only 
nominally operational. Rail travel is possible from Managua 
north to Leon or south to Granada. The existing system con- 
sists of 373 kilometers of 1.067-meter narrow gauge in the 
Pacific region and an isolated three kilometers of 1.435-meter 
standard-gauge line at Puerto Cabezas in the northeast. Several 
trains a day carry passengers south from Managua to Granada, 
or north from the capital to Leon. The Leon-to-Corinto section 
has been out of service since 1982, when floods damaged the 
tracks. The government has plans to construct a new standard- 
gauge line from Corinto through Managua to San Juan del 
Norte on the Caribbean, but. lack of funding has delayed con- 
struction. 

The country has 2,220 kilometers of inland waterways, 
including two large lakes, Lago de Managua and Lago de Nica- 
ragua, and five significant ports, two on the Pacific Coast and 
three on the Caribbean coast. Corinto and Puerto Sandino are 
Nicaragua's principal ports on the Pacific Coast; the smaller 
Caribbean coast ports are Puerto Cabezas, Bluefields, and El 
Bluff. Rama is a river port where goods or travelers from west- 
ern Nicaragua change to river boats to continue their journey 
to Bluefields. The country's principal port, Corinto, is a deep- 
water port with alongside berthing facilities and is suitable for 
general import and export cargo. Puerto Sandino, the second 
largest Pacific coast port, handles petroleum products through 
an offshore buoy and pipeline; it is not suitable for deep-water 
berthing. Although mined by the United States in the 1980s, 
neither harbor suffered permanent damage. The Caribbean 



135 



Nicaragua: A Country Study 




Figure 11. Transportation System, 1993 



coast ports are hampered by a lack of rail or road connections 
with western or central Nicaragua, where most economic activ- 
ity for the country takes place. Bluefields and Puerto Cabezas 
are used primarily for fish and lumber exports; El Bluff is a mil- 
itary port. 

Augusto C. Sandino International Airport, twelve kilome- 
ters outside of Managua, is the country's principal airport. 
Although ten other cities have paved airfields, none have 
scheduled airline service. 

Telecommunications 

Nicaragua's telecommunications system, like the rest of its 
infrastructure, is outdated and suffers from lack of mainte- 



136 



The Economy 



nance. The backbone of the telecommunications system is the 
Central American Microwave System (CAMS), a 960-channel 
radio-relay system that extends from Mexico to Panama. Low- 
capacity radio-relay and wire lines branch off the CAMS to pro- 
vide service to smaller towns. In 1993 there were approximately 
60,000 telephones, only 1.5 per 100 inhabitants. Although the 
number of telephones increased by about 10 percent per year 
during the 1970s, that increased number did not begin to meet 
demand. Few telephones have been installed since 1979. 

When the CAMS was installed in the 1970s, planners envi- 
sioned that all international telecommunications would travel 
along the CAMS to satellite ground stations in Guatemala and 
Panama. However, planners of the system failed to take politi- 
cal realities into account. Whenever disputes arose among the 
countries of Central America, a common tactic was for one gov- 
ernment to shut down the CAMS "for maintenance," effectively 
isolating the other countries on the isthmus from the outside 
world. Each country in Central America then built its own sat- 
ellite ground station in the 1980s to assure continuous commu- 
nications. In 1993 Nicaragua had two satellite ground stations, 
one operating with the International Telecommunications Sat- 
ellite Corporation's (Intelsat) Atlantic Ocean satellite and the 
other a part of the former Soviet Union's Intersputnik system. 

Radio broadcast services reach all parts of the country and 
include forty-five mostly privately owned amplitude modula- 
tion (AM) medium-wave stations and three AM shortwave sta- 
tions for broadcasts to remote areas in the Caribbean lowlands. 
Managua also has eleven frequency modulation (FM) radio sta- 
tions. Eight towns have television stations. In 1993 there were 
approximately 880,000 radio receivers and 210,000 television 
sets. 

Electric Power and Energy 

Nicaraguan electric power capacity expanded rapidly from 
1950 to 1970, increasing about sixfold during that period. The 
system did not receive much attention throughout the Sandi- 
nista era, however, and power lines and transformers were fre- 
quently a focus of Contra attacks. The major centers of 
population and industry in the Pacific lowlands are served by 
an integrated power system. As late as 1993, the Caribbean 
region remained without an interconnected power grid. In the 
last nationwide survey in 1975, only 41 percent of the total 



137 



Oil refinery near Managua 
Courtesy Nicaraguan Tourism Institute 

number of dwellings and just 7 percent in rural areas had elec- 
tricity. 

In the early 1990s, Nicaragua obtained half of its 423-mega- 
watt electric generating capacity from thermal generating 
plants. One geothermal electric plant operates on the slopes of 
the Momotobo volcano. A Soviet-financed hydroelectric plant 
was completed at Asturias in 1989, and in 1993 a large 400- 
megawatt hydroelectric plant was under construction at 
Copalar on the Rio Grande. 

Roughly half of Nicaragua's energy needs are satisfied by 
imported petroleum. The country's only refinery, located in 
Managua, is operated by Esso (Standard Oil) and has a capacity 
of 16,000 barrels per day. From 1979 to 1982, most of Nicara- 
gua's oil came from Mexico and Venezuela through terms of 
the San Jose Accord (see Glossary), under which Mexico and 
Venezuela agreed to supply Nicaragua with oil. Both countries 
stopped supplies, however, when Nicaragua became delin- 
quent on payments. The Sandinista government then turned 
to Cuba, Eastern Europe, and the Soviet Union for oil. The tur- 
moil in Eastern Europe and the Soviet Union in 1989 resulted 
in deliveries dropping far short of demand. Electric power gen- 
eration plummeted to 20 percent of capacity, and blackouts of 



138 



The Economy 



up to ten hours a day were common. The new government of 
President Cham or ro negotiated Nicaragua's outstanding debts 
with Mexico and Venezuela, and in 1991 these countries began 
delivering oil again. 

Prospects 

After almost four years in office, President Chamorro has 
made little headway in overcoming the substantial obstacles 
facing her. She has yet to win the support, or investments, of a 
reluctant private sector. Significant political realignments dur- 
ing her term have allowed her to move closer to reconciliation 
with representatives of the Sandinista labor forces. However, in 
late 1993, Nicaragua continued to face large trade and fiscal 
deficits, and it had yet to capture the confidence of either 
domestic or international investors. The government contin- 
ues to pin its hopes for economic recovery on the potential of 
its forests and on agricultural exports. 

* * * 

In 1993 analysis of all things Nicaraguan, including the econ- 
omy, continued to be colored by political orientation. Special- 
ized regional newsletters, particularly Latin American Newsletter 
[London] , Central America Report, This Week in Central America, 
Latin American Monitor, and Business Latin America, provide use- 
ful data. Brizio N. Biondi-Morr's Hungry Dreams is particularly 
useful, as is Anthony Lake's edited volume, After the Wars, for its 
analysis of the effects of the regional conflicts. Sheldon Annis's 
data on the new nature of poverty in Central America in Pov- 
erty, Natural Resources, and Public Policy in Central America are also 
helpful. (For further information and complete citations, see 
Bibliography.) 



139 



Chapter 4. Government and Politics 



i 




President Daniel Ortega congratulating Violeta Chamorro on her electoral vic- 
tory, February 25, 1 990 



ON FEBRUARY 25, 1990, Nicaragua's voters elected Violeta 
Barrios de Chamorro as president, ending almost eleven years 
of government by the Sandinista National Liberation Front 
(Frente Sandinista de Liberacion Nacional — FSLN). The 
choice was a dramatic one because voters hoped that the new 
government of the newly formed National Opposition Union 
(Union Nacional Opositora — UNO) would bring an end to 
more than a decade of civil conflict and the harsh sectarianism 
of the Sandinista (see Glossary) years and improve the rapidly 
deteriorating economy. In her predawn acceptance speech the 
morning after her election, President-elect Chamorro tried to 
establish a climate of reconciliation, stating that there were nei- 
ther victors nor vanquished in the election. Soon after, recog- 
nizing the FSLN "as the second political force of the nation," 
she stated her commitment to respect the will of the 40 percent 
of the people who had voted for the FSLN. The losing candi- 
date, President Daniel Jose Ortega Saavedra, about two hours 
later foreswore the FSLN's self-image as a "vanguard party" and 
delineated the FSLN's future role as a strong, but loyal, opposi- 
tion party. Rhetorically, at least, the stage seemed set for the 
cooperation between the two camps needed to bring about 
economic recovery. 

Almost four years later, however, efforts to move the country 
toward peace and prosperity seemed stalled. Although the 
Chamorro government continued to stress that it intended to 
achieve reconciliation, President Chamorro has had the full 
cooperation of neither the Sandinistas nor her own coalition. 
Instead, in early 1993 the government faced the dilemma of 
dealing with a Sandinista opposition that viewed reconciliation 
as a means of protecting its rights to confiscated property and a 
powerful element of the UNO coalition that viewed those 
property rights as ill-gotten gains and urged strong action 
against the Sandinistas to recover that property. 

Whether the new government is consolidating democracy 
or reverting to the traditional authoritarian and elitist style of 
Nicaraguan politics is a central issue. President Chamorro's 
cooperation with the Sandinistas, particularly her decision to 
retain Humberto Ortega Saavedra as head of the army, has led 
her supporters to accuse her of capitulating and establishing a 
"co-government" with the defeated Sandinistas, rather than 



143 



Nicaragua: A Country Study 

reforming the political system in cooperation with her elec- 
toral partners. Her government also has been accused by mem- 
bers of the UNO coalition of excessively concentrating power 
in the hands of a small group of members of her extended fam- 
ily, promoting the same brand of government practiced under 
the Somoza family dynasty: centralizing power in a small group 
instead of expanding it in a democratic fashion. Finally, the 
UNO has been criticized for failing to promote the concept of 
democracy at a grassroots level. Nevertheless, the distribution 
of power for the first time to the municipal level through the 
1990 elections has created a new class of political officials who 
are struggling to assert power at a grassroots level. The Sandi- 
nistas also have continued the grassroots organizing efforts that 
originally brought them to power. Both phenomena hold 
promise, as well as dangers, for the future of democracy in Nic- 
aragua. 

The Chamorro Government Takes Power 

The Chamorro victory in the 1990 elections surprised most 
of the participants and many observers, both domestic and 
international. Many Nicaraguans did not view Chamorro as a 
politician and found her unprepared for a leadership role. The 
election date had been advanced nine months by the Sandinis- 
tas from the constitutionally set month of November 1990. This 
decision was taken in response to the meeting of representa- 
tives of the Nicaraguan government with the Nicaraguan Resis- 
tance (commonly referred to as Contras — short for contrarevo- 
lucionarios — see Glossary) at Sapoa. The talks represented a 
Sandinista effort to secure a definitive end to United States 
assistance to the Contras and an end to the civil conflict that 
was debilitating the economy and eroding the Sandinistas' base 
of support. The talks seemed designed to project the Sandinis- 
tas 1 image as peacemakers, and the Sandinista leadership was 
confident of winning the upcoming election. 

From the moment on election night that the UNO victory 
was evident, there was widespread fear that the Sandinistas 
would block the Chamorro government from taking power. In 
hopes of securing a stable transition, Chamorro took a concilia- 
tory approach toward the defeated Sandinistas. The three most 
influential international groups that came to observe the elec- 
tions became a crucial element in ensuring a peaceful transi- 
tion. Nevertheless, the negotiated transition created problems 



144 



President Violeta Barrios de 
Chamorro 
Courtesy Embassy of 
Nicaragua, Washington 



that would haunt the Chamorro government through at least 
the early years of its existence. 

Negotiations on the transition began on February 27, 1990, 
in Managua. A meeting between the FSLN and UNO leaders 
took place in the presence of former United States president 
Jimmy Carter, Organization of American States (OAS) Secre- 
tary General Joao Baena Soares, and the head of the United 
Nations (UN) electoral mission, former United States attorney 
general Elliott Richardson. The Nicaraguan parties agreed to 
continue negotiations on important transition issues and 
named two chief negotiators: Antonio Lacayo Oyanguren, Cha- 
morro's son-in-law and campaign manager, for the UNO; and 
Humberto Ortega Saavedra, minister of defense and President 
Ortega's brother, for the FSLN. 

Negotiations between UNO and the Sandinistas led to a 
series of arrangements on amnesty, property, and media laws, 
as well as a Protocol on Procedures for the Transfer of Presi- 
dential Powers, signed by representatives of the UNO and the 
FSLN on March 27, one month after the elections. The agree- 
ment gave the Sandinistas guarantees that the changes they 
had instituted in their eleven years in power would not be over- 
turned. The protocol pledged to carry out efforts toward rec- 
onciliation "on the basis of a national understanding that will 



145 



Nicaragua: A Country Study 

take into account the achievements and transformations imple- 
mented thus far for the people's benefit, and all must be based 
on full respect for rights, Nicaragua's Constitution, and the 
laws of the Republic." 

Specific guarantees were given on property rights: the pro- 
tocol provided "tranquility and legal security to the Nicaraguan 
families who have benefited from grants of urban and rural 
properties by the state before 25 February 1990, harmonizing 
such grants with the legitimate legal rights of Nicaraguans 
whose property was affected, for which purpose actions must 
be taken according to law. Methods to provide adequate com- 
pensation to those who may be affected will be established." 
The protocol also provided guarantees of job stability to gov- 
ernment officials and employees "on the basis of their effi- 
ciency, administrative honesty, and years of service. ..." 

On paper at least, the Chamorro government secured guar- 
antees that the military would submit to civilian rule, that it 
would be amenable to restructuring and downsizing, and that 
it would be nonpartisan because members on active duty would 
not be allowed to hold leadership posts in political parties. The 
Sandinistas, however, obtained guarantees of their continued 
control of the military because the protocol provided for 
respect "for the integrity and professionalism of the Sandinista 
People's Army (Ejercito Popular Sandinista — EPS) and of the 
forces of public order as well as for their ranks [hierarchy and], 
promotion roster, and . . . [command structure] in accordance 
with the Constitution and the laws of the Republic . . . ." These 
guarantees were confirmed on inauguration day, April 25, 
1990, by President Chamorro's decision to retain the Sandi- 
nista minister of defense, General Humberto Ortega Saavedra, 
as army chief. 

These transition agreements formed the basis for the rela- 
tionship between the outgoing Sandinista and the incoming 
Chamorro governments. They facilitated a peaceful transfer of 
power. Along with the follow-up "transition" laws that the lame- 
duck Sandinista-dominated National Assembly passed in the 
interregnum before Chamorro's inauguration, the transition 
agreements became part of the legal structure under which the 
Chamorro government would operate. In the first months of 
the Chamorro regime, the transition agreements provided the 
basis for Sandinista challenges on the scope and interpretation 
of laws. They also created a rift between the Chamorro govern- 
ment and most of the leaders of the coalition that had sup- 



146 



Government and Politics 



ported it, who charged that the Chamorro team had made 
unnecessary and detrimental concessions to the FSLN. The 
Chamorro government, however, argued that its options were 
limited. It had inherited a Sandinista-constructed constitu- 
tional and legal system and owed its existence to the Sandinista 
revolutionary process; its existence was not the result of a mili- 
tary victory that would have enabled construction of a new 
political system that may have been more to its constituents' lik- 
ing. 

Constitutional Background 

The Nicaraguan constitution promulgated on January 1, 
1987, provided the final step in the institutionalization of the 
Sandinista regime and the framework under which the 
Chamorro government would take office. It was the ninth con- 
stitution in Nicaraguan history. The Sandinistas 1 revolutionary 
mythology and aspirations were glorified in the preamble, and 
the Nicaraguan army was constitutionally named the Sandini- 
sta People's Army. Yet, even though drafted and approved by a 
Sandinista-dominated assembly, the constitution was not a revo- 
lutionary document. It established a democratic system of gov- 
ernment with a mixed economy based on a separation of 
powers that could guarantee civil liberties (see fig. 12). There 
was some discontent with parts of the new system. Early objec- 
tions were raised that the executive branch was too strong, that 
property rights were not adequately protected, and that some 
of the language was vague and subject to widely differing inter- 
pretations. These objections continued to be an issue under 
the Chamorro government. 

The Executive 

The constitution provides for a strong executive branch, 
although the legislative and judicial branches retain significant 
powers of their own. Under the constitution, the president has 
broader powers than does the president of the United States. 
The president is commander in chief of the military, has the 
power to appoint all ministers and vice ministers of his or her 
cabinet, and proposes a national budget. The executive shares 
legislative powers that allow him or her to enact executive 
decrees with the force of law in fiscal and administrative mat- 
ters, as well as to promulgate regulations to implement the 
laws. The president assumes legislative powers when the 



147 



Nicaragua: A Country Study 



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148 



Government and Politics 



National Assembly is in recess. He or she has extraordinary 
powers during national emergencies, including the powers to 
suspend basic civil liberties and to prepare and approve the 
national budget. 

The president's term was set at six years by a decree promul- 
gated in January 1984, during the period when the country 
had no constitution. Elections held under that decree resulted 
in Daniel Jose Ortega Saavedra's beginning a term as president 
on January 10, 1985. The 1987 constitution reaffirmed a six- 
year term for the president. Esquipulas II, the international 
peace accord that ended the Contra insurgency, however, set 
February 25, 1990, as the date for the next election. Violeta 
Ghamorro assumed the post of president on April 25, 1990, 
more than eight months before the constitutionally mandated 
date of January 10, 1991. It was understood that Chamorro 
would serve for the additional eight-month period created by 
the advanced elections, as well as for the full six-year term from 
January 10, 1991 to January 10, 1997. The next elections are 
scheduled for late 1996, although pressure has been mounting 
for these elections to be advanced also. 

The Legislature 

The 1987 constitution replaced the bicameral Congress, 
which had existed under previous constitutions, with a unicam- 
eral National Assembly. The makeup of the National Assembly, 
first established under the 1984 decree and confirmed by the 
1987 constitution, consists of ninety members directly elected 
by a system of proportional representation plus any unelected 
presidential or vice presidential candidates who receive a cer- 
tain percentage of the vote. In 1985 the National Assembly had 
ninety-six members and in 1990, ninety-two (see table 9, 
Appendix A) . Terms are for six years, to run concurrently with 
the president's term. 

The National Assembly has significant powers, and its coop- 
eration is essential for the smooth functioning of the govern- 
ment. Under the constitution, representatives to the National 
Assembly propose legislation, which is made law by a simple 
majority of the representatives present if the National Assembly 
has a quorum (a quorum is half the total number of represen- 
tatives, plus one) The National Assembly can override a presi- 
dential veto by a simple majority vote if a quorum is present. 
The constitution also gives the National Assembly the power 
"to consider, discuss and approve" the budget presented by the 



149 



Nicaragua: A Country Study 

president. The National Assembly chooses the seven members 
of the Supreme Court from lists provided by the president and 
has the authority to "officially interpret the laws," a prerogative 
that gives the National Assembly judicial powers. 

The Chamorro administration has faced a legislature that, 
despite its division between the Sandinista members and the 
members of the UNO coalition, has proved a formidable power 
in its own right — and one with which the executive branch is 
often in conflict. In the 1990 elections, of the ninety-two seats 
in the National Assembly, the UNO won fifty-one and the FSLN 
gained thirty-nine. The FSLN won thirty-eight seats in assembly 
races, and President Ortega was given a seat under the provi- 
sion granting a seat to each losing presidential candidate who 
earns a certain percentage of the vote. Two other parties of the 
ten on the ballot gained single seats. One was won by the Chris- 
tian Social Party (Partido Social Cristiano — PSC) in a legislative 
race; another was awarded to the losing presidential candidate 
of the Revolutionary Unity Movement (Movimiento de Unidad 
Revolucionaria — MUR), a breakaway faction of the FSLN. The 
only significant brake on the UNO's power was that its majority 
of 55 percent fell short of the 60 percent needed to amend the 
Sandinista-approved constitution, a goal of some members of 
the UNO coalition. The slim UNO majority also presented 
practical problems for the UNO president because it was possi- 
ble for relatively few defections from the UNO coalition to 
undermine the UNO government's programs and initiatives. 

The Judiciary 

Under the 1987 constitution, the Supreme Court is an inde- 
pendent branch of government, whose members are selected 
for six-year terms by the National Assembly from lists submitted 
by the president. From among those members, the president 
selects the head of the Supreme Court. The constitution also 
provides that the Supreme Court justices appoint judges to the 
lower courts. Supreme Court justices can only be removed con- 
stitutionally "for reasons determined by law." 

In National Assembly-approved 1990 reforms to the 
Organic Law of Tribunals, the Chamorro government 
enlarged the Supreme Court's membership from the constitu- 
tionally mandated seven justices to nine, as a way of breaking 
what was perceived as Sandinista domination of the court. 
Those seven members had been appointed to their six-year 
terms in December 1987, and their terms were to expire in 



150 



Former National Palace, 
renamed the Palace of the 

Heroes of the Revolution 
Courtesy Edmundo Flores 




1993. In 1990 President Chamorro also dismissed the court's 
Sandinista-appointed head and replaced him with one of her 
own choosing. The evaluation of this act depended on one's 
political point of view. According to Nicaraguan analysts, the 
nine-member court decided that it would take decisions only 
on the basis of consensus, a procedure some saw as guarantee- 
ing Sandinista influence on the court, others saw as neutraliz- 
ing Sandinista influence, and still others saw as effectively 
paralyzing the operations of the court. 

Local Government 

Municipal governments have introduced a new element to 
Nicaraguan politics that promises to substantially decentralize 
political power and influence. Established by the Law on 
Municipalities adopted by the Sandinista National Assembly in 
August 1988, the first municipal governments were selected in 
1990. The municipal government structure with basic govern- 
ing authority is the Municipal Council (Consejo Municipal). 
Under the provisions of the law, citizens vote directly for coun- 
cil members; the number of these depends on the size of the 
cities. Once elected, council members select their own leader, 
the mayor, who serves with their approval. 

Administratively, Nicaragua is divided into nine regions, 
which are subdivided into seventeen departments (fifteen full 



151 



Nicaragua: A Country Study 

departments and two autonomous regions in the Caribbean 
lowlands that are treated as departments). In 1992 the country 
had 143 municipal units of varying sizes. Of the municipal 
units, fifteen are cities with populations estimated at more than 
50,000; Managua, the capital city, is the largest, with an esti- 
mated 1.5 million inhabitants. Of the remaining municipal 
units, thirty are cities with populations estimated between 
20,000 and 50,000, twenty-three are towns of 10,000 to 20,000 
inhabitants, and seventy-two have fewer than 10,000 inhabit- 
ants. The number of council members is based on the number 
of inhabitants; in 1992 Managua had the most, with twenty 
council members. Cities that are department capitals or have 
20,000 or more in population have ten council members; towns 
with fewer than 20,000 inhabitants have five. 

The responsibilities and powers of the municipal govern- 
ments and their method of conduct are based on constitu- 
tional provisions and on the 1988 Law on Municipalities. 
Article 176 of the constitution provides that the municipality is 
the "basic unit" of the administrative political divisions of the 
country. Article 177 provides that municipal authorities "enjoy 
autonomy without detriment to the faculties of the central gov- 
ernment." The Law on Municipalities enumerates the responsi- 
bilities of the municipal government, specifies its taxing 
powers, and establishes rules for its functioning. Among the 
responsibilities are control of urban development; use of the 
land, sanitation, rainwater drainage, and environmental pro- 
tection; construction and maintenance of roads, parks, side- 
walks, plazas, bridges, recreational areas, and cemeteries; 
verification of weights and measures; and establishment of 
museums, libraries, and other cultural activities. As is true in 
the United States, the primary taxing power of municipal gov- 
ernments is assessment of property, including houses and vehi- 
cles. 

Public Administration 

Nicaragua's public employees are not perceived as civil ser- 
vants; new appointments are usually made on the basis of polit- 
ical patronage rather than through a selection system based on 
merit. Nevertheless, both the Sandinista government and the 
Chamorro government have respected the positions of those 
whom they found occupying public administration posts when 
each successive government took power. The primary motive 
of the Sandinista government, which took power after a revolu- 



152 



Government and Politics 



tion, may have been expediency, as it needed at least a core of 
persons who had occupied posts under the previous Somoza 
administration to instruct it in the workings of the govern- 
ment. In the case of the Chamorro government, the position of 
public employees was guaranteed by the transition pacts and 
was protected by law. 

Public employee ranks include not only office workers but 
also medical and other professional personnel hired by the 
Sandinista government to work in public programs and state- 
owned businesses. Soon after the Chamorro government took 
power, the number of public employees was estimated in news- 
paper accounts at 150,000, most of whom were Sandinistas. 
Efforts to restructure the laws to eliminate some public 
employees led to a strike in May 1990 (see Interest Groups, this 
ch.). When the Chamorro government sought in early 1991 to 
cut the number of public employees, it had to offer incentives 
for workers who volunteered to leave, as well as additional 
incentives for businesses to hire former government workers or 
for the workers themselves to set up private enterprises. By the 
time the severance program expired in April 1992, some 
23,000 workers had resigned to take advantage of the plan, and 
some 20,000 soldiers and police officers had been dismissed. 

Political Dynamics 

Conflict Between the Executive and Legislative Branches 

Almost from the day it took power, the Chamorro govern- 
ment was a stepchild. All groups recognized the necessity of a 
relationship with the Chamorro government, but even though 
Violeta Barrios de Chamorro personified the Nicaraguan peo- 
ple's desire for peace, neither the UNO nor the FSLN recog- 
nized the government as the legitimate representative of its 
political, social, and economic aspirations for Nicaragua. The 
strong constitutional powers of the executive branch theoreti- 
cally should have given the president adequate control over the 
political and economic systems, but the transition agreements 
left the Sandinistas with control over the military and the 
police, thus curtailing the executive branch's power of coer- 
cion. The Sandinistas also continued to control the strongest 
labor unions, which became a powerful political bloc on the 
issue of economic reforms. Although increasingly divided, the 
Sandinistas provided, as Daniel Ortega had warned in his con- 



153 



Nicaragua: A Country Study 

cession speech, a critical opposition that limited the govern- 
ment's range of action. 

The president was further weakened by her estrangement 
from the political and economic coalition that had supported 
her during the election. Distrust initially was sparked by the 
transition agreements, which much of the UNO viewed as too 
accommodating to a political movement that had lost an elec- 
tion and would lose further support when no longer in power. 
The political parties composing the UNO coalition were quick 
to establish their own bases of support within the legislature 
and the municipalities. Although few of the parties reached for 
grassroots support, whatever was developed was done so by leg- 
islators and municipal officials to enhance their personal 
power bases or for their own parties, not for the central govern- 
ment or the UNO coalition. From the beginning of the 
Chamorro administration, UNO leaders were critical of the 
tight family networks that controlled the executive branch. 
They began to accuse the president of nepotism and to criticize 
the government for using its prerogatives for private gain. 

Other influential voices on all sides also opposed the 
Chamorro government. Most of the media and the university 
leadership were joined with opposition forces of either the 
UNO coalition or the Sandinistas. The hierarchy of the Roman 
Catholic Church, which had forcefully contested the Sandinista 
government, also began strongly criticizing the Chamorro 
administration. Groups of businesspeople and farmers, the 
unemployed (including former Contras and dismissed Sandi- 
nista soldiers), and the unions all entered, sometimes violently, 
the contest over the future shape of the economy, property 
ownership, and the redistribution of wealth and land. 

Although in stable, democratic countries such political con- 
flict would appear to be no more than the normal cacophony 
of competing voices, in Nicaragua the stakes were high. At issue 
was the government's ability to stimulate a war-torn, depressed 
economy in which nearly half of the working-age population 
was unemployed or underemployed by early 1992. Also at issue 
was the government's capacity to institutionalize democratic 
attitudes and procedures. Different political parties, interest 
groups, and other influential voices all had their own visions of 
what form the economy and a democratic government should 
take and what each group's share and role in both should be. 
Rather than leading the country, the Chamorro government 
was compelled to act as a broker among competing interests in 



154 




Office of the Ministry of Interior in Managua 
Casa del Gobierno in Managua 
Courtesy James Rudolph 



155 



Nicaragua: A Country Study 

resolving the two central issues of her early administration: the 
resolution of property issues and the establishment of peace 
through the demobilization and resettlement of the Contras 
and the Sandinista military. 

Dispute over Property Rights 

The dominant political issue in Nicaragua during the early 
years of the Chamorro government became the Pinata — the 
massive transfer and titling of confiscated and expropriated 
property, including homes, agricultural plots, and businesses, 
which the Sandinista government conducted during the 
interim lame-duck period between the February 1990 election 
and Chamorro's inauguration in April 1990. Named after the 
candy-stuffed papier-mache figures that are hung for children 
to strike with sticks and break open, the Pinata created divi- 
sions and resentments throughout the political order. Within 
the Sandinista movement, rancor arose as the Pinata created 
new classes of "haves" and "have-nots." Within the UNO, it pro- 
gressively became one of the more divisive issues as the execu- 
tive branch of the Chamorro administration sought to protect 
the titles of the transfer and UNO groups within the National 
Assembly sought to invalidate them. 

Law 85 and Law 86, the two Pinata laws passed by the Sandi- 
nista-dominated National Assembly during the transition 
period, not only guaranteed the rights of squatters and tens of 
thousands of small farmers given land under the Sandinista 
agrarian reform, but also allowed Sandinistas to appropriate 
much other state-owned property. Estimates of the amount of 
property transferred ranged between US$300 million and 
US$2 billion. The property reportedly included thousands of 
"good to luxury homes," including beach houses, that were 
titled to Sandinistas at a small fraction of their value. Also given 
away were large state-owned properties such as cattle ranches, 
warehouses, and office buildings; state-owned businesses; and 
smaller items such as cars, taxis, trucks, machinery, office furni- 
ture, and equipment, including radio and television transmis- 
sion towers. In what one Nicaraguan referred to as a private 
Pinata, the Central Bank of Nicaragua (Banco Central de Nica- 
ragua) transferred to Daniel Ortega and his close associates 
some US$24 million during the last three weeks of the Sandi- 
nista government. The result was the instant creation of a prop- 
ertied and entrepreneurial class of Sandinistas and resentment 



156 



Government and Politics 



from the poorer and mid-level Sandinistas who got little or 
nothing. 

The issue of dealing with the Pihata became a political bat- 
tlefront in 1991, when conservative members of the National 
Assembly sponsored a proposal to revoke the Pihata laws. In 
June 1991, the National Assembly voted to pass the matter to 
the Economic Commission for study, a move that sparked 
debate and protest from the executive branch because decid- 
ing the issue in a legislative commission would preempt negoti- 
ation among farmers, trade unions, and businesses over the 
resolution of property issues. The move also marked the emer- 
gence of National Assembly president Alfredo Cesar Aguirre, 
one of the primary architects of the reconciliation policy 
toward the Sandinistas, as the leader of the legislative challenge 
to the executive branch's position. 

As a result of reconciliation negotiations, President 
Chamorro decreed two laws that would allow residents to keep 
homes awarded them in the Pihata if they owned no others. 
They also would have to pay market value for the houses if they 
chose to sell them or convert them to rental property. In 
response to the president's action, the next day the National 
Assembly passed an alternative plan, Law 133, by a vote of fifty- 
two to thirty-nine. Law 133 confirmed transfer of small homes 
and agrarian properties but required those who had received 
homes worth more than US$11,600 and farms larger than 
thirty-four hectares to pay market value for them within three 
months. The action by the National Assembly nullified the 
president's decrees of the previous day. The assembly vote in 
favor of Law 133 was composed of all fifty-one UNO deputies 
and one independent; the thirty-nine votes against it were from 
the entire Sandinista delegation in the first parliamentary ses- 
sion they had attended since the property law was introduced 
in June. 

On September 11, 1991, President Chamorro vetoed as 
unconstitutional twenty-one of thirty-two clauses in the new 
property law. On December 10, a group of nine deputies from 
the UNO and the Sandinista delegation, calling itself the "Cen- 
ter Group," (Grupo de Centro — GC) demanded a vote on the 
veto. When the vote was held four days later, several of the 
UNO deputies of that group and the delegation of thirty-nine 
Sandinistas voted to support the presidential veto, touching off 
accusations that the executive branch had bought the UNO 
votes. 



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Nicaragua: A Country Study 

The conflict was defined by principal players as an impor- 
tant step in the process of establishing a state of law. National 
Assembly president Alfredo Cesar Aguirre viewed invalidating 
the property title transfer as essential for preserving respect for 
written agreements because he felt the Sandinistas had abused 
the transition period by passing laws that contravened the tran- 
sition agreements. Minister of the Presidency Antonio Lacayo 
countered that the government was bound to respect the laws 
transferring title passed by the Sandinista assembly because 
that assembly had the legal authority to pass those laws, despite 
its lame-duck status. To revoke those titles, he argued, would be 
to approve ex-post-facto laws and undermine respect for 
proper law passage. 

More important, however, was how the land-transfer issue 
catalyzed change in both the Sandinista movement and the 
UNO coalition. The Pinata was pointed to as one of the major 
causes of the vocal demands for democratization within the 
Sandinista movement and one of the principal reasons for the 
disaffection of mid-level and lower-ranking Sandinistas who 
sought new political alternatives. The Pinata also appeared to 
be one of the major causes of the solidification of the UNO 
bloc in the National Assembly, which became a significant 
source of power and a weighty counterpoint to the Chamorro 
government. 

The threat to the Sandinistas was multifold, both materially 
and politically. Reflecting the seriousness of the problem, when 
the legislation to repeal the land transfer was introduced, 
former president Daniel Ortega warned that war could return 
and voiced what was widely interpreted as a death threat 
against UNO National Assembly deputies. Protesting the repeal 
bill, Sandinista demonstrators occupied six city halls, including 
the city hall of Managua, and three radio stations. Besides 
depriving top Sandinistas of their homes and new livelihoods, 
the repeal attempt also underscored the gap between the San- 
dinista elite and the poor. 

The government's inability to resolve property issues was 
also blamed for the stagnation and the subsequent deteriora- 
tion of the nation's economy. The lack of substantial domestic 
and foreign investment was viewed as a vote of no confidence 
in the government's handling of private property issues and its 
commitment to impartial treatment of private investment. 
Despite mechanisms subsequently developed by the govern- 



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Government and Politics 



ment to consider property claims on a case-by-case basis, the 
Pihata remained a volatile issue. 

Political Parties 

The National Opposition Union (UNO) Coalition 

A loose coalition of political parties, UNO traces its origins 
back to the Nicaraguan Democratic Coordinating Group 
(Coordinadora Democratica Nicaraguense — CDN), which was 
formed in 1982 by opposition groups that had protested 
actions of the Sandinista government as early as November 
1980. In 1980 these groups had temporarily withdrawn their 
members from the corporatist legislature set up by the Sandi- 
nista government, the Council of State, to protest the imposi- 
tion of three emergency decrees that restricted civil liberties 
and to call for municipal elections that the Sandinistas had 
stated would be held soon after the revolution. The CDN coali- 
tion consisted of three political parties and two factions of a 
fourth; two labor unions, the Confederation of Nicaraguan 
Workers (Confederacion de Trabajadores Nicaraguenses — 
CTN) and the Confederation for Trade Union Unity (Confede- 
racion de Unificacion Sindical — CUS); and the Superior Coun- 
cil of Private Enterprise (Consejo Superior de la Empresa 
Privada — Cosep), an umbrella organization uniting producer 
and commercial business groups along the lines of the United 
States Chamber of Commerce. These groups all formed the 
earliest opposition to the Sandinista government. 

In the mid-1980s, as a result of Nicaragua's 1984 presidential 
and legislative elections, the opposition broadened with the 
incorporation of three political parties, which up to that point 
had cooperated closely with the government: the Independent 
Liberal Party (Partido Liberal Independiente — PLI), the Popu- 
lar Social Christian Party (Partido Popular Social Cristiano — 
PPSC), and the Democratic Conservative Party (Partido Con- 
servador Democrata — PCD). In the late 1980s, while the CDN 
parties remained outside the legislative arena, the three other 
parties, which had run candidates in the elections, became 
known as the "parliamentary opposition." From inside and out- 
side the legislature, opposition groups became increasingly 
vocal against the Sandinista government. 

Their opposition to the Sandinistas did not forge these 
groups into a firm coalition, however. Instead, the parties were 
known for personal rivalries and factionalism. There were ani- 



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Nicaragua: A Country Study 

mosities and distrust among the leaders of each of the groups, 
stemming from the degree of cooperation and confrontation 
each had taken toward the Sandinista government. The groups 
also held conflicting and ambivalent attitudes toward the 
United States-supported Contra forces that had carried out a 
war against the Sandinista government since early 1982. 

Nevertheless, during the later years of the Contra war, the 
"civic opposition," as these political parties, unions, and busi- 
ness organizations came to be called, became of great interest 
to the international community, which was interested in seek- 
ing a negotiated solution to the Contra war through the Cen- 
tral American peace process. The political parties gained the 
support of international groups such as the Christian Demo- 
cratic International, the Conservative International, and the 
Liberal International organizations. Esquipulas II, the Central 
American peace agreement signed by the presidents of five 
countries in Central America (see Glossary) on August 7, 1987, 
gave a major role to the Roman Catholic Church and the oppo- 
sition political parties in negotiating the terms for national rec- 
onciliation and democratization in Nicaragua. Although the 
arrangements specified in this agreement were never imple- 
mented as planned, the accord itself was a major factor in stim- 
ulating the Sandinistas to lift various constraints on the civic 
opposition, creating the opportunity for greater political activ- 
ity. The accord also played a part in the Sandinista decision to 
advance the election from November to February 1990 and to 
allow an extensive system of United Nations (UN) and Organi- 
zation of American States (OAS) monitors to observe the 
entire electoral process, beginning several months before the 
election. 

By the time the various political parties coalesced into an 
electoral coalition in September 1989, the fourteen political 
parties that had evolved from the earlier opposition parties 
were committed enough to the goal of opposing the Sandinista 
government that they united around a single candidate. Vio- 
leta Barrios de Chamorro, who had largely stayed outside party 
politics during the 1980s, was chosen after two bitter rounds of 
voting eliminated the two other popular candidates: Virgilio 
Reyes Godoy (who became vice president) and Enrique Bol- 
anos Geyer of Cosep. Both had been active in internal politics 
throughout the 1980s. At the time of the elections, of the UNO 
coalition's fourteen political parties, four were considered con- 
servative, seven fell under a broad definition of centrist parties, 



160 



Government and Politics 



and three had traditionally been on the far left of the political 
spectrum (see table 10, Appendix A). 

Of all the parties, the largest of the centrist group were the 
Democratic Party of National Confidence (Partido Democrata 
de Confianza Nacional — PDCN), which was one of several 
breakaway factions of the Nicaraguan Social Christian Party 
(Partido Social Cristiano Nicaraguense — PSCN), and the PLI 
of Virgilio Godoy. Among the conservative factions, viewed as 
the most important was the Conservative Popular Alliance 
(Alianza Popular Conservadora — APC) of Miriam Arguello 
Morales, a leading figure in conservative politics since the 
1970s. All the other parties were seen as small groups. In the 
centrist camp, these were the Liberal Party (Partido Liberal — 
PL), the National Action Party (Partido de Accion Nacional — 
PAN), the Popular Social Christian Party (Partido Popular 
Social Cristiano — PPSC, another faction of the PSCN) , and the 
Nicaraguan Democratic Movement (Movimiento Democratico 
Nicaraguense — MDN). In the conservative arena, the smaller 
groups were the Conservative National Action Party (Partido 
de Accion Nacional Conservadora — PANC), the Liberal Con- 
stitutionalist Party (Partido Liberal Constitucionalista — PLC), 
and the National Conservative Party (Partido Conservador 
Nacional— PCN). 

Two years after the inauguration, however, the UNO was 
still viewed as having a narrow political base. Only three of the 
fourteen parties, among them the PLI, whose leader was Vice 
President Virgilio Godoy Reyes, had done local-level political 
organizing across the country. Although some trade union 
organizations supported the UNO coalition, the UNO parties 
did not have the type of widespread organizations of labor, 
peasant, and women's groups that had provided support for 
the FSLN. 

Friction between the executive branch circle, named the 
Las Palmas group after the neighborhood in which President 
Chamorro lived, and the UNO legislators was first apparent in 
the contest for the presidency of the National Assembly. Held 
days before the president's inauguration, the struggle for lead- 
ership of the National Assembly was one of the first tests of 
power between the Political Council, composed of the leaders 
of the fourteen political parties, and Chamorro's advisers, 
whom many of the traditional political party leaders viewed as 
interlopers. One of Chamorro's closest advisers, Alfredo Cesar 
Aguirre, was defeated for an UNO position by the Political 



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Nicaragua: A Country Study 

Council's candidate, Miriam Arguello Morales, a leader of the 
APC. During this and subsequent debates, Vice President 
Godoy sided with the Political Council. Frictions between the 
Las Palmas group and the UNO were further exacerbated by 
President Chamorro's cabinet selections. All were members of 
her inner circle; none was a leader of a traditional political 
party. 

The dynamic changed slightly with a shift of characters 
when Cesar was elected leader of the National Assembly for the 
1992 legislative session. Within months of his election, how- 
ever, he had taken a leadership role on the volatile issues of 
Sandinista property rights and presence in government, this 
time against the government. The UNO bloc in the assembly 
seemed to be reuniting on the same issues, but this time under 
a younger generation of leaders. 

Despite the importance of the National Assembly in shaping 
national policy, much of the nation's future was increasingly 
shaped by the evolving politics of the municipalities. The 1990 
elections established a new class of political leaders. The UNO 
parties were weak in organization at the grassroots level, and 
the creation of new political posts at the municipal level 
offered opportunities and incentives for the development of a 
broad base of popular support for the UNO. Because of the 
UNO parties' weaknesses at the national level, however, the 
leading UNO mayors viewed themselves as enjoying a far 
greater level of popular support and legitimacy than the 
national UNO authorities. The local UNO officials, who had 
power in about 100 of the country's municipal governments, 
have at times taken united stands challenging the Chamorro 
government. In general, the UNO municipal authorities, the 
most visible of whom is Managua's mayor, Arnoldo Aleman, are 
more conservative than the Las Palmas group and have taken 
positions similar to that of the Godoy group and later the Cesar 
group, at the national level. 

Small Non-UNO Parties 

Several important political groups that opposed the Sandi- 
nistas during the 1980s but did not run with the UNO coalition 
in 1990 had almost disappeared from the national political 
scene by 1993. These parties were factions of the PCD, consid- 
ered one of the larger opposition parties during the 1980s; 
leaders of these factions were Clemete Guido, Eduardo Molina 
Palacios, and Rafael Cordova Rivas. Other smaller non-UNO 



162 




Political slogans painted on walls in Managua 
Courtesy Nina Serafino 



163 



Nicaragua: A Country Study 

parties were breakaway factions of parties in the UNO coali- 
tion: Mauricio Diaz Davila's faction of the PPSC; Erick Ramirez 
Benevente's PCSN, a breakaway from the PSC; and Rodolfo 
Robelo's Independent Liberal Party of National Unity (Partido 
Liberal Independiente de Unidad Nacional — PLIUN), a splin- 
ter group from the PLI (see table 11, Appendix A). The only 
member of these parties to gain a seat in the National Assembly 
was Moises Hassan Morales of the MUR, a breakaway faction of 
the FSLN; Hassan automatically gained a seat as a defeated 
presidential candidate. 

Sandinista National Liberation Front 

The FSLN has maintained the cohesion needed to continue 
as a potent force in Nicaraguan politics despite an internal cri- 
sis touched off by its electoral defeat. From the moment that 
Daniel Ortega publicly conceded defeat, he launched an initia- 
tive to preserve the gains that the Sandinista government 
claimed to have secured for the Nicaraguan people and the 
property that the movement had acquired. However, the per- 
formance of the FSLN leadership before and after the elec- 
tions regarding the social welfare issue became a topic of 
dispute among the leaders of the groups and between the lead- 
ership and the local members. The dispute was so severe that it 
threatened to destroy the cohesive party apparatus and disci- 
pline that the movement had created over almost three 
decades of struggle and power. 

In his concession speech, President Ortega in essence fore- 
swore the FSLN's identity as a "vanguard party" and called on 
the FSLN to play a role as a strong but loyal opposition party. In 
subsequent speeches, Ortega made clear that the FSLN, with 
40 percent of the vote, still considered itself the largest single 
political force in Nicaragua. Although this new definition pro- 
vided the basis for the FSLN's continued role in government, 
the tension between its two roles — its role as the country's larg- 
est political party and as a force in opposition to the govern- 
ment — proved problematic for the FSLN in the early years of 
adjustment to the Chamorro regime. 

Despite the FSLN's success in maintaining a position for the 
party and benefits for its members in the postelectoral period, 
the electoral loss intensified preexisting political tensions 
within the FSLN, opened new ideological divisions, and 
brought a host of practical problems that posed great difficul- 
ties for continuing party activity. The short-term result within 



164 



Government and Politics 



the first two years after the FSLN's electoral defeat was the cre- 
ation of new power bases and elites. In addition, there were 
contradictory indications about the future of the party: one was 
that it might begin reconstituting itself along more traditional 
political party lines, and the other was that it would modernize, 
but not at the expense of its revolutionary social principles. 

The most pressing practical problems were continued 
financing of the party apparatus and continued employment 
for party members. By the end of the Sandinista government, 
the organizational structure of the party coincided with the 
administrative structure of the state, including the military and 
security forces. Thus, according to one analyst, the loss of the 
government meant the loss of party structures and, in effect, 
the dispersal of the membership when the new government's 
economic program separated thousands from their work. For 
the FSLN, this change meant that its political apparatus shrank 
from several thousand persons to a few hundred after the elec- 
tion; for many members, it meant that holding on to their old 
jobs or obtaining new ones became the central focus of life. 
The Pihata was in part a result of the need to secure new means 
of support: ownership of property and companies established a 
financial base from which FSLN members could earn personal 
livelihoods and produce profits for continued party activities. 

The ideological and political debate that took place after 
the election was an outgrowth of ideas that had circulated but 
never had been formally raised before the election. These 
ideas acquired new urgency as the Sandinistas sought to under- 
stand the causes of their defeat. Positions were formulated in 
preparation for postelection party activities. The ruling body 
during the postelectoral years continued to be the National 
Directorate, which had been in place since 1979, minus two 
members. Missing were Humberto Ortega, who, under the 
terms of the transition agreement, had been obliged to give up 
his place in order to remain at the head of the army, and Carlos 
Nunez Tellez, who died in October 1990. The new seven-mem- 
ber National Directorate continued to meet regularly and 
drafted the guidelines for the document analyzing the elec- 
toral defeat that was to be discussed in the first postelection 
Sandinista Assembly in June 1990. That first meeting made 
clear the extent of the internal differences within the FSLN. 

The three-day June 1990 Sandinista Assembly meeting held 
in El Crucero was attended by a large number of FSLN mem- 
bers. The membership consisted of all FSLN National Assembly 



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Nicaragua: A Country Study 

members, department coordinators, mass organization leaders, 
and representatives of the National Workers' Front (Frente 
Nacional de Trabajadores — FNT). The open debate that char- 
acterized this meeting and the resulting statement that eventu- 
ally was circulated were viewed as central in opening the party 
to candid public criticism. In addition, the Sandinista Assembly 
created an Ethics Commission to examine the activities of party 
members from the top leadership down and called for the 
FSLN's first national party congress. Party activities for the next 
year were geared toward preparation for the congress, held in 
July 1991. 

Although calls for the democratization of the party did not 
produce changes in the top leadership, they had their effect at 
lower levels. In August and September 1990, for the first time, 
almost 600 executive committees and coordinators were 
elected, rather than appointed, at the municipal and depart- 
mental levels. These elections were seen as significant because 
they resulted in the election of people who would not have 
been selected under the previous rules. The elections were less 
than a fully democratic enterprise, however, because campaign- 
ing was not permitted, forestalling any uncontrolled discussion 
of the future of the party. The elections also led to debate 
about the membership of the party. The Sandinistas opted not 
to follow the model of standard parties by creating an open 
membership. They did establish, however, in addition to the 
categories of militants and aspirants, who numbered 18,000 
and 17,300, respectively, in August 1990, a third category of 
membership — affiliates, numbering 60,400 that month. The 
party leadership also held about 200 local meetings in the sum- 
mer of 1990 to discuss a draft statement on programs, princi- 
ples, and a proposal for new bylaws that would be presented to 
the FSLN's National Congress. More than 3,000 elected dele- 
gates attended eighteen departmental meetings in mid-June 
1991 to debate the issues and choose 501 representatives to the 
National Congress. 

The democratization process did not reach to the very top 
of the FSLN leadership, however. Early expectations that the 
501 National Congress delegates would elect individual mem- 
bers to the National Directorate were quashed when the 
National Directorate proposed that the National Congress vote 
on the candidates as a group. The departmental congresses rat- 
ified this proposal and another giving the nonelected members 
of the Sandinista Assembly voting rights in the National Con- 



166 



Government and Politics 



gress. In July 1991, nine candidates for the National Director- 
ate ran unopposed as a slate. The slate consisted of the seven 
current members plus the former vice president and current 
head of the Sandinista bloc in the National Assembly, Sergio 
Ramirez Mercado, and the National Directorate secretary, 
Rene Nunez Tellez. Humberto Ortega was on the slate but 
declined a seat because of his army position. Daniel Ortega was 
elected secretary general of the party. Thus, some congress del- 
egates' hopes of removing individual members were dashed, 
and the slate was elected by a 95 percent vote. 

Nevertheless, the National Congress did adopt significant 
liberalization measures. It elected ninety-eight members to a 
new 120-member Sandinista Assembly. The National Congress 
also decided that future national congresses, to be held every 
four years, would elect the members of the Sandinista Assem- 
bly, the Ethics Commission, and the National Directorate indi- 
vidually by a secret and direct vote. This change was hailed as 
progress, although not the democratization that a significant 
but minority elite desired. 

The National Congress also brought to the fore the ideolog- 
ical debate between two FSLN factions. On the one side were 
the pragmatists who sought accommodation with the 
Chamorro forces and professed a new, more social democratic 
orientation. On the other side were the "principled" or radical 
forces, who sought a continuation of the old revolutionary 
model and saw progress as dependent on establishing a clear 
confrontational position against the Chamorro government. 
The National Congress also aired the FSLN leadership's self- 
criticism of the party, attributing the electoral loss to several of 
the party's own failings. Still, ideologically, the congress's result 
was indeterminate, preserving many of the party's revolution- 
ary aspirations and anti-imperialist, anticapitalist principles but 
also urging modernization and adaptation to the current glo- 
bal situation. 

Differences within the FSLN led to new forces within the 
party. Three factions have emerged, united on ideals and ends 
but not necessarily on means, according to analyst Aldo Diaz 
Lacayo. One faction, headed by Humberto Ortega, stresses the 
need for an alliance with the Chamorro government's "pro- 
gressive bourgeoisie." The second faction, composed of those 
holding positions in state structures such as the National 
Assembly and headed by Sergio Ramirez, calls for uncondi- 
tional democratization. The third, headed by Daniel Ortega, is 



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Nicaragua: A Country Study 

the party's union sector and is often viewed as the most tradi- 
tionally Sandinista in style and ideology. 

Interest Groups 

The Ex-Contras and Recontras 

The Nicaraguan Resistance was unable to establish itself as a 
political presence in Nicaragua after the 1990 elections, despite 
its part in bringing them about. The Chamorro government 
found little place in its government, outside of national-level 
organizations set up to deal with the Contras' resettlement, for 
the fighters and leaders of the principal Contra group that had 
fought in northern Nicaragua. Part of the reason for this exclu- 
sion was that prominent individuals within the new govern- 
ment, such as Alfredo Cesar Aguirre, had served as part of a 
rival Contra group known as the Southern Front, which disinte- 
grated in the mid-1980s after the United States Central Intelli- 
gence Agency (CIA) withdrew its aid. The expulsion of the 
Contras also has been attributed to social factors because the 
Chamorro government is largely made up of Nicaragua's old 
elite and the Contra leaders are from the middle and lower 
classes. In addition, the restriction of the Contras was a political 
move: incorporating ex-Contras into the government would 
alienate many Sandinistas and make more difficult the recon- 
ciliation envisioned by Chamorro's government. Whatever the 
underlying reasons, the rationale stated by supporters of the 
Chamorro government is that even though the Contras were 
important to the electoral outcome, the victory was not a mili- 
tary one but an electoral one, and those who waged the elec- 
toral battle are those who are entitled to govern. A year after 
the election, former Contras who felt abandoned by the new 
government and unable to influence it within the system began 
rearming. 

Obstacles to the establishment of a Contra political pres- 
ence in Managua began with arrangements for demobilizing 
and resettling the Contras set forth in transition agreements 
signed shortly before and after the Chamorro government 
took power. The first of the documents was the March 27, 1990, 
Toncontfn Accord between the Nicaraguan Resistance and 
members of the UNO government-elect signed in Honduras. 
The Contras committed themselves to the concept of demobi- 
lizing and promised that all Contras remaining in Nicaragua 
would hand in their weapons by April 20, 1990. The definitive 



168 



Government and Politics 



peace accord between the outgoing Sandinista government 
and the Nicaraguan Resistance was signed on April 18, 1990, 
and took effect at noon the following day. The agreement pro- 
vided that all Nicaraguan Resistance forces would immediately 
begin to move into security enclaves under the protection of 
the UN Central American Observer Group, a UN peacekeep- 
ing force. The government was to withdraw all military, para- 
military, and security forces to a point at least twenty kilometers 
from the enclave borders by April 21. 

These agreements seemed to be in trouble just hours after 
the Chamorro inauguration. Contra leaders, protesting Presi- 
dent Chamorro's decision to retain General Humberto Ortega 
as chief of the army, stated that there would be no national rec- 
onciliation and that none of their troops would disarm as long 
as General Ortega remained in that post. Shortly thereafter, 
however, the Chamorro government and the resistance issued 
a joint Managua Declaration stating that the Contras would 
begin the process of turning in their weapons on May 8 and 
complete the process by June 10. In turn, the government 
announced on June 10 its plans to reduce the size of the army 
and to guarantee the Contras' safety. 

The subsequent disarmament process was again halted in 
May when Sandinista unions went on strike and resistance lead- 
ers stated that the strike confirmed the Chamorro govern- 
ment's lack of control. Nevertheless, most of the rebels had 
surrendered their arms by the June 10 Toncontin deadline. 
Under separate arrangements, the remaining rebels agreed to 
hand in their weapons — the Yatama Contra forces by June 21 
and the Southern Front rebels by July 25, 1990. Demobilized 
Contras received a change of civilian clothes, farm tools, a 
US$50 cash grant, rations of rice and beans, and a promise of 
land. 

Within months, however, these agreements had broken 
down, and violence resumed as the ex-Contras were unable to 
settle on the land they had been promised in development 
areas, saw their economic prospects evaporate as the economy 
worsened, and felt their security threatened by the continued 
Sandinista presence in the military and in the police. The first 
incident occurred in July 1990, when some fifteen to twenty 
armed Contras, led by Commander Ruben (Oscar Manuel 
Sobalvarro Garcia), briefly occupied the central bus terminal 
in Managua and exchanged fire with Sandinista labor union 
strikers. 



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Nicaragua: A Country Study 

A dozen members of the UN peacekeeping force negotiated 
the Contras' withdrawal. However, this incident was followed in 
1990 by ex-Contra attempts to seize land held in Sandinista 
cooperatives and by their blockage, together with local peas- 
ants, of the Managua-Rama road, the country's major east-west 
highway, for eighteen days. 

Incidents increased in 1991 as conflict between ex-Contras 
and Sandinista police and army officials continued. About the 
time the ex-Contras formally announced that they were taking 
up arms again (and were promptly dubbed the Recontras), the 
OAS cease-fire monitoring forces had documented the mur- 
ders of some thirty-five former Contras. For some Contras, the 
February 16, 1991, murder of former Contra leader Enrique 
Bermudez Varela in a Managua hotel parking lot underscored 
the state of insecurity and exacerbated their distrust of the San- 
dinista police. Bermudez, who had taken up residence in 
Miami after the war, had been visiting Managua to conduct per- 
sonal business and to urge the government to treat the ex-Con- 
tras better. The police allegedly handled investigations in a 
manner suggesting negligence, ineptitude, and a cover-up, 
although Sandinistas countered that Bermudez may have been 
killed by disaffected Contras. 

The Bermudez murder came just as ex-Contras, as well as 
other peasants, were increasing pressure for access to land 
before the May planting season. Thousands of the some 18,000 
to 20,000 Contras who had turned in their weapons had not 
received the land promised them under the demobilization 
agreement, and many others found they could not farm the 
land they had received because of a lack of promised tools and 
infrastructure. In early April, Commander Dimas (Tomas 
Laguna Rayo), one of several rearming commanders, claimed 
that the hills around Esteli concealed 200 newly rearmed Con- 
tras, who intended to take over territory to use as leverage to 
make demands on the government. Incidents between Recon- 
tras and Sandinista officials continued throughout the year 
with no major clashes. Estimates of Recontra strength 
increased from a few hundred to an estimated 1,000 personnel 
with assault rifles. By the end of the first year of demobilization, 
the OAS had verified fifty-two slayings, often of Recontras, 
about half attributed to Sandinista military or police. 

The Recontras' first major action occurred in late July 1991, 
when eighty Recontras attacked a local police station in Quilali 
and battled for six hours under the leadership of Commander 



170 



Government and Politics 



Indomable (Jose Angel Moran Flores). In August 1991, Minis- 
ter of Interior Carlos Hurtado Cabrera met with Indomable 
and Dimas to discuss Recontra demands: the disarming of San- 
dinista farm cooperatives, the removal of army bases from areas 
of Recontra activity, removal of police and army officials known 
to violate human rights, investigation of the killings of ex-Con- 
tras, and indemnification of ex-Contra families. 

For several months thereafter, although the Recontra activi- 
ties centered on disruptive rather than violent activities and 
there were few major battles, the Nicaraguan countryside 
threatened to return to violence. However, by early 1992 the 
government seemed to be gaining control of the situation. The 
uncertainty created by the Recontras was exacerbated in late 
1991 by the formation of Recompas, rearmed former Sandi- 
nista soldiers. The Recompas, many of them junior officers, 
acted to bring attention to their demands for land and to 
respond to Recontra activities, including the assassination of a 
Sandinista police chief and his secretary. Eventually, there were 
reports of both groups working together on behalf of one basic 
demand: land and the equipment to work it. The government 
countered by ordering the Sandinista People's Army not to 
engage in combat and retaliatory actions and by offering to 
meet some Recontra demands. The OAS observer group 
played an important role in mediating disputes and calming 
tempers. In early 1992, the government offered Recontra lead- 
ers money to retire, offered both Recontras and Recompas 
from US$100 to US$200 for each weapon turned in, and prom- 
ised both groups houses and land. That offer led to a surpris- 
ing 20,000 weapons being turned in under OAS supervision, 
although estimates were that some 30,000 to 80,000 weapons 
were still held by civilians. 

Labor Organizations 

The Sandinista unions played a major role in the politics of 
the Chamorro government's first years. The change of govern- 
ment sparked a competition in union organizing and activities 
that posed serious challenges to the new government. One 
challenge for the new Chamorro government was to create and 
maintain political bases by organizing workers; the other was to 
maintain political and economic stability when confronted by 
strikes led by Sandinista unions. 

The first challenge resulted from a new freedom for unions 
to organize, created by a law the National Assembly had passed 



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Nicaragua: A Country Study 

in the interregnum. This law changed the labor code to allow 
workplaces to have more than one union. The law was adopted 
because the lame-duck Sandinista majority feared that the gov- 
ernment would replace the Sandinista unions with UNO 
unions while maintaining a closed shop. After the new law took 
effect, the unions that had supported the UNO moved to break 
the Sandinista monopoly on organizing in the public sector by 
organizing groups of the required twenty-five members to form 
a new bargaining unit. In some places, such as the San Antonio 
sugar mill, which with 5,000 workers was the largest union in 
the country, workers decided to retain the old union but voted 
out the board of directors who had been Sandinista supporters. 

A greater challenge was posed by strikes initiated by the 
strongest unions — those affiliated with the FSLN. These unions 
were no longer bound by ties to a leadership in power to sup- 
port austerity policies that had adversely affected the workers. 
Within a month after the Chamorro government took office, 
the Sandinista unions became a political and economic force 
with which to reckon. 

Despite the election of a government supported by the 
UNO-affiliated unions, the Sandinista unions are widely 
believed to remain the largest and most powerful organized 
labor sector, despite diminishing power and membership. 
Although there is a law requiring the registration of new 
unions, the exact number of unions is not known because 
there is no legal provision to account for those unions that had 
merged or ceased to exist. At the top of the labor-organizing 
hierarchy are four confederations: one affiliated with the San- 
dinistas, two with the UNO, and one with a Trotskyite orienta- 
tion. The Sandinista-affiliated confederation, FNT, organized 
in mid-1990, claimed to have 400,000 members among its 
seven member organizations during the early Chamorro years, 
although most observers believe that it has lost considerable 
strength. The members of the FNT include the Sandinista 
Workers' Federation (Central Sandinista de Trabajadores — 
CST), a confederation of labor unions; the Association of Agri- 
cultural Workers (Asociacion de Trabajadores del Campo — 
ATC); the National Employees Union (Union Nacional de 
Empleados — UNE), composed of white-collar workers; the 
Federation of Health Workers (Federacion de Trabajadores de 
Salud — Fetsalud); the National Association of Nicaraguan 
Teachers (Asociacion Nacional de Educadores de Nicaragua — 
ANDEN); the Union of Nicaraguan Journalists (Union de 



172 



Government and Politics 



Periodistas de Nicaragua — UPN); and the Heroes and Martyrs- 
National Confederation of Professional Associations (Confede- 
racion Nacional de Asociaciones Profesionales-Heroes y 
Martires — Conapro-Heroes y Martires) . 

The UNO-affiliated unions are grouped in two confedera- 
tions. One is the CTN, headed by Carlos Huembes Trejos. 
Formed during the 1960s, it is affiliated with the Christian 
Democratic regional labor group, the Confederation of Latin 
American Workers (Central Latinoamericana de Trabaja- 
dores — Clat), and the Christian Democratic international 
labor organization, the World Confederation of Labor. The 
CTN has an estimated 40,000 members. The other UNO union 
is the Permanent Congress of Workers (Congreso Permanente 
de Trabajadores — CPT) umbrella group, organized in the late 
1980s, which includes five organizations. Most prominent of 
these is the Confederation for Trade Union Unity (Confedera- 
tion de Unification Sindical — CUS), formed in 1968 with the 
support of the Inter-American Regional Organization of Work- 
ers and the Confederation of Nicaraguan Workers (autono- 
mous) (Confederacion de Trabajadores Nicaraguenses 
[autonoma] — CTN [a]) of Agustin Jarquin Anaya, a break-away 
faction from the CTN. The CPT also includes the Federation 
for Trade Union Action and Unity (Central de Action de Unifi- 
cacion Sindical — CAUS) of the Communist Party, the General 
Confederation of Workers-Independent (Confederacion Gene- 
ral de Trabajadores-Independiente — CGT-I) of the Nicaraguan 
Socialist Party (Partido Socialista Nicaragiiense — PSN), and 
the National Teachers' Confederation of Nicaragua (Confede- 
racion Nacional de Maestros Nicaraguenses — CNMN). 

If the numbers of members given by labor organizations are 
accurate, some 650,000 of an estimated total active labor force 
of 1.1 to 1.2 million persons are affiliated with a union. Some 
analysts believe that number, which is more than 50 percent of 
the labor force, is very high. Whatever the size of their mem- 
bership, at least the Sandinista unions have had a major influ- 
ence in shaping the direction and pace of the Chamorro 
government's economic policy. 

The potential of the Sandinista unions to disrupt the gov- 
ernment was demonstrated within two weeks of the Chamorro 
government's inauguration. Estimates are that 30,000 to 60,000 
out of some 150,000 government workers impeded work in 
government offices, schools, banks, public transportation, and 
telephone and airport operations in mid-May 1990. The strike 



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Nicaragua: A Country Study 

began as a result of the Chamorro government's decisions to 
reexamine the lame-duck legislation passed by the outgoing 
Sandinista Assembly as well as other government actions dur- 
ing the transition period. In labor matters, the Chamorro gov- 
ernment annulled the lame-duck collective bargaining 
arrangements and suspended the civil service law giving job 
security and increased benefits to public employees. President 
Chamorro also announced that tenants would be allowed to 
cultivate unused expropriated farmlands while property claims 
were being settled, and she established a commission to review 
claims to confiscated lands. Other measures taken early in the 
Chamorro government included the National Assembly's pas- 
sage of an amnesty law pardoning all political crimes as of the 
effective date of the legislation and annulment of a March law 
giving amnesty to Sandinista government officials for crimes 
committed in the course of performing official duties. 

The Sandinista-affiliated UNE called first for a work stop- 
page of selected workers and then for a general strike. For- 
mally, workers demanded a 200 percent pay increase and 
restitution of the civil service law, but calls in the streets encom- 
passed a variety of political demands, including President 
Chamorro's resignation. At first the government declared the 
strike illegal, threatened to fire striking workers, and refused to 
meet with Sandinista union leaders. When the strike persisted, 
the government decided not to test the loyalty of police and 
military forces by ordering the use of force to dislodge strikers 
from occupied buildings and instead negotiated with leaders of 
the public workers' union. 

The strike resulted in the Sandinistas gaining some but not 
all that they had asked for: a 25 percent wage increase on top of 
the 16 percent that the government had already promised, the 
right for unions to take part in drafting regulations to imple- 
ment the civil service law that had been revised by the UNO 
National Assembly, and the rehiring of workers fired after 
March 19, 1990. Some analysts viewed the strike as actually 
hurting the Sandinista unions. Politically, however, the Sandi- 
nista unions had demonstrated their power to force the gov- 
ernment to reconsider its actions. The strike also strengthened 
Sandinista demands for national dialogue on the property 
issue. Many viewed the strike as a fulfillment of Daniel Ortega's 
promise during the election aftermath that the Sandinistas 
would rule from below. The FSLN's leadership denied, how- 
ever, that the FSLN had orchestrated the strike. 



174 



Government and Politics 



The next large-scale strike of 85,000 to 100,000 workers was 
called on June 27, 1990, by the newly formed FNT. It began in 
earnest on July 2 and ended on July 11 only after several people 
had died and hundreds more had been injured. The FNT's ini- 
tial seven demands, subsequently expanded, encompassed a 
grab bag of issues, including a higher minimum wage, reenact- 
ment of the Sandinista civil service law, suspension of two 
decrees on property restitution, and measures for public sup- 
port of construction, basic services, health, and education. The 
unions were widely viewed as the winners when an agreement 
was finally reached to end the strike. This agreement provided 
for increased wages; benefits for dismissed workers; guarantees 
for continued transportation subsidies; suspension of the pro- 
gram renting unused and disputed land to previous owners; 
FNT participation in plans for reactivation programs and pro- 
grams to maintain jobs, including subsidies to failing textile 
and construction companies; and talks on a minimum wage 
law. The government's economic concessions were broad and 
backtracked on its economic reform and adjustment program. 

Economically, the May and July strikes cost the government 
an estimated US$270 million, according to one source. Politi- 
cally, the July 1990 strikes and settlement pact also dealt several 
blows to the Chamorro government. First, the tensions 
between Chamorro's UNO backers and her small executive 
team over reconciliation gestures toward the Sandinistas wid- 
ened into an open rupture as the Chamorro government bent 
to the Sandinista unions. Vice President Godoy announced 
that he was forming a Committee of National Salvation to deal 
with the strike and received the backing of Cosep, UNO lead- 
ers in the National Assembly, and UNO-affiliated union lead- 
ers. Thus, the Chamorro government's short-lived truce with its 
UNO backers was over. Second, the Sandinista unions demon- 
strated the destabilizing possibilities of their "rule from below" 
strategy. Although the Sandinista military and police had dis- 
mantled street barricades put up by the strikers and had not 
been openly disloyal to the government during the strike, the 
government still appeared unwilling to test their loyalty and 
did not order the military and police to use force against or 
arrest the strikers. These events foreshadowed a situation in 
which the price of social peace would be either substantial con- 
cessions from the government or actions by the Sandinista 
leadership to back up statements of support for the govern- 
ment's economic plan by exercising control over their affiliated 



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Nicaragua: A Country Study 

unions. The relationship between the Sandinista directorate 
and the unions became a source of controversy, with members 
of the directorate denying that they had encouraged the union 
protests. Critics doubted, however, that Sandinista party disci- 
pline had declined to the point that the unions could act 
autonomously. The Chamorro government signed agreements 
ending the strike directly with the unions, not with the Sandin- 
ista leaders, however, indicating that the Sandinista leader- 
ship's control over the unions was limited. 

The political situation in July 1990 further encouraged the 
government to cultivate good relations with Sandinista leaders 
and unions because, as the July disturbances suggested, the 
government had no alternative. Yet the Sandinistas 1 ability to 
incite followers to the streets waned quickly after the summer 
strikes. A call from the Sandinista leaders and the FNT for a 
nationwide strike in October 1990 prompted little response. 
An FNT rally against the government's economic policies 
turned out 3,000 rather than the expected 60,000 demonstra- 
tors. Probably as a result, the FNT agreed to join President 
Chamorro's discussions among unions, producers, and the gov- 
ernment to reach a national understanding, the concertacion, 
on economic and social policies. The concertacion agreement, 
signed in October 1990, brought several months of peace 
before the property issue ignited. Another damper on Sandi- 
nista union activity may have been Humberto Ortega's caution- 
ary remarks to the July 1991 Sandinista National Congress; he 
noted that irresponsible union demands and actions would 
condemn the country to crisis and imperil revolutionary goals. 

The concertacion agreement also appeared to temporarily 
defuse economic unrest. Strikes soon after the accord were of 
the uncontrolled variety, more likely to alienate than attract fol- 
lowers. However, a crisis developed in October 1991 when 
Daniel Ortega criticized the government as harking back to 
Somozaism with its policy of returning land to former owners 
and with the announcement that the mayor of Managua was 
contemplating the creation of a municipal police force. Ortega 
indicated that the people might have to exercise their right to 
civic rebellion, even with arms. President Chamorro accused 
the FSLN of calling for armed insurrection. 

Protesting the new policy of privatization, Sandinista union 
members occupied a meat-packing plant and slaughterhouse 
in September 1991; five sugar refineries, a soap plant, and 
many large farms were taken over by early November. Workers 



176 



Government and Politics 



demanded that they be granted a 25 percent share in owner- 
ship when properties were returned to the private sector, some- 
thing the Chamorro government had promised in August 1991 
agreements. In Managua, police battled with students and 
health workers, who marched to the Ministry of Labor armed 
with clubs and homemade bombs. The violence escalated after 
the FNT's rejection of a November 7 agreement between the 
FSLN directorate and the government to end the strikes. There 
reportedly were also violent incidents in Matagalpa and Esteli 
and riots in Managua, where Sandinista followers destroyed 
Radio Corporacion, attacked Contra offices with rocket- 
launched grenades, and looted and set fire to city hall. Earlier, 
armed men had fired on the home of Vice President Godoy. 
The rioting ended when President Chamorro said she would 
call in the army and Daniel Ortega appealed to Sandinistas for 
order. 

The 1991 incidents displayed the distance between the Cha- 
morro government and the UNO-affiliated unions. The CPT 
complained when Vice President Godoy stated that the army 
and police chiefs should be dismissed for not stopping the ram- 
page that caused an estimated US$3 million in damage. On 
November 13, the CPT went further, deploring the executive 
branch's tolerance of and complicity in Sandinista terrorism 
and crimes, a complaint that continued in 1992 and 1993. 

The labor problem continued to present a serious challenge 
to the Chamorro government through at least the midpoint of 
her term. Former President Ortega emerged openly as the 
champion of labor union mobilization against the Chamorro 
economic policies. In the midst of a strike of transport workers 
in September 1993, Ortega urged Sandinistas to support 
marches protesting a vehicle ownership tax and a gasoline 
price increase. He tied these new taxes to the need for a 
change in the government's economic policies and the need to 
resolve property issues. 

Producers' Groups 

The two major groups of producers, the UNO-affiliated 
Cosep and the Sandinista-affiliated National Union of Farmers 
and Cattlemen (Union Nacional de Agricultores y Ganade- 
ros — UNAG), began distancing themselves from the political 
arena after the 1990 election and concentrating more narrowly 
on serving their members' economic interests. On opposite 
sides of the political scene during the Sandinista years, both 



177 



Nicaragua: A Country Study 

unions had played important political and economic roles. Dif- 
ferent political positions after 1990, however, brought them 
closer in their attitudes toward the country's economic situa- 
tion. 

Formed in 1978, Cosep acts as a coordinating council for 
commercial and agricultural organizations. Cosep was viewed 
during the early Sandinista years as the major force in the anti- 
Sandinista opposition, trying in the early 1980s to engage in 
dialogues with the Sandinista government even as it adopted a 
highly confrontational stance. Cosep's position, however, was 
weakened in the mid-1980s by the flight of the middle class and 
by members' fears that their property would be confiscated, 
and in the late 1980s by pressure from the peace negotiations. 
Although one Cosep leader, Enrique Bolanos Geyer, had been 
a potential presidential candidate for the 1990 elections, Cosep 
supported Chamorro in the electoral campaign after she won 
internal elections within the UNO. Two Cosep members 
refused cabinet posts in the Chamorro government, however, 
protesting Chamorro's decision to maintain Humberto Ortega 
as chief of the army. The organization has continued to oppose 
decisions that allow the Sandinistas considerable influence in 
government, fearing that such a practice will produce an unfa- 
vorable investment climate. 

UNAG is one of the Sandinista mass organizations; it was 
founded in April 1981 to organize small- and medium-sized 
farmers in support of the FSLN. Although always pro-Sandini- 
sta, UNAG tried to downplay ideology in the countryside in the 
1980s and fought for nondogmatic, inclusive policies that 
would not alienate peasant property owners and would defend 
the interests of all efficient rural producers. After the Chamo- 
rro government took power, continued efforts to broaden its 
base. It sought to attract discontented, landless Contras to its 
ranks and to maintain its political influence by trying to 
develop joint positions on agricultural policy with Cosep and 
its large agricultural producers. 

The two producers' groups continued to represent very dif- 
ferent political, ideological, and economic positions. These dif- 
ferences were made clear during the Chamorro government's 
1990 attempt to negotiate the economic and social national 
concertacion. UNAG decided to participate in the negotiations 
even before the Sandinista unions agreed to do so. Cosep par- 
ticipated only after expressing objections that the result had 
been predetermined in previous discussions between the San- 



178 



Government and Politics 



dinistas and the government. Cosep later refused to sign the 
final document, charging that the final agreement was unfair 
because the government had agreed to union demands that 
land and other confiscated and expropriated property should 
not be returned to former owners. The concertacion opened a 
permanent breach between Cosep and the government. 

The Church 

The Roman Catholic Church hierarchy, which had been 
regarded by the Sandinista government as among its harshest 
critics, also became critical of the Chamorro government well 
before its second anniversary. From the beginning, the 
church's hierarchy had a role in the new Chamorro govern- 
ment: Cardinal Miguel Obando y Bravo, Archbishop of Mana- 
gua, was named one of the guarantors of the peace accords 
signed during the 1990 transition period. The Roman Catholic 
Church also had a part in shaping society under the new gov- 
ernment, according to some sources. Cardinal Obando was 
influential in revamping the national education system and 
curriculum to eliminate Sandinista influence. The educational 
revisions were carried out by Minister of Education Humberto 
Belli and his vice minister, Sofomas Cisneros Leiva, both of 
whom were close to Cardinal Obando, and by members of the 
City of God charismatic Roman Catholic sect. 

For a short period at the beginning of the Chamorro gov- 
ernment, the Roman Catholic Church abandoned the high- 
profile political and social posture it had assumed during the 
Sandinista years. However, the low profile was reversed when, 
on November 24, 1991, Cardinal Obando and Nicaragua's nine 
bishops, speaking as the Bishops' Conference of Nicaragua, 
signed a lengthy pastoral letter. This letter deplored the coun- 
try's economic situation and faulted the government for a fail- 
ure to establish justice. The letter also accused the government 
of corruption and accused, without naming them, the Sandi- 
nista labor unions of inciting violence. Finally, the letter criti- 
cized levels of military spending and the luxurious life-styles of 
many officials in the government in the face of poverty. In a 
statement that appeared to counter pressures from the United 
States for Nicaragua to open the economy totally to market 
forces, the bishops stated that poverty had reached "levels 
unprecedented for several decades" and noted their belief that 
"the free market alone cannot resolve underlying social prob- 
lems." 



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Nicaragua: A Country Study 
The Universities 

Nicaragua's two principal universities, the Central American 
University (Universidad de Centroamerica — UCA) and the 
National Autonomous University of Nicaragua (Universidad 
Nacional Autonoma de Nicaragua — UNAN), are viewed as 
strongholds of Sandinista thought and sympathy, but are not 
considered influential in the political system. In 1992 Xavier 
Gorostiaga, a well-known pro-Sandinista economist and a Jesuit 
priest, was the rector of the UCA, a Jesuit-run and church- 
financed institution. Alejandro Serrano Caldera, who served 
the Sandinista government as president of the Supreme Court 
and Nicaraguan ambassador to the United Nations, was the 
rector of the state-financed UNAN in 1993. Both are well- 
known intellectuals who are viewed as bringing academic credi- 
bility and strength to the universities. 

The universities have actively sought to protect their own 
interests. During the transition period, the country's four state 
and two private universities were granted academic, financial, 
and administrative autonomy by the outgoing Sandinista legis- 
lature through the University Autonomy Law. The universities 
were also given the right to elect their own rectors, faculty 
council, and other governing bodies. Students, faculties, and 
administrators protested the Chamorro government's attempts 
in May 1990 to have the National Assembly suspend the elec- 
toral agreements in order to provide time for their review. The 
government backtracked, and the National Assembly eventu- 
ally passed a law containing only minor reforms. University 
protests were not effective against the Chamorro government 
budget cuts for the universities, which passed the National 
Assembly in December 1991 with Sandinista support. 

The Media 

Noted during the Sandinista years for its virulently partisan 
and sensationalist character, the communications media began 
to show small signs of moderation and objectivity as the 
Chamorro regime progressed. However, partisanship was still a 
key word in the printed and broadcast press, and Sandinista 
dominance over the communications media largely continued, 
despite the transfer of power in the government. After the 
1990 elections, however, important differences of opinion 
emerged in the relationship between the Sandinista-dominated 
media and official FSLN positions. 



180 



Government and Politics 



The greatest news source for most Nicaraguans is the radio. 
Some radio stations are considered so influential that oppo- 
nents of their political position target them for attacks. The 
rightist Radio Corporation, for instance, was heavily damaged 
twice by Sandinistas in the early years of the Chamorro govern- 
ment, and the Sandinista Radio Ya was attacked by unknown 
assailants. 

The three major dailies of the Sandinista period continued 
to dominate the print media market in 1993. La Prensa, 
founded in 1926, with an estimated circulation of 30,000 in 
early 1992, continued the family tradition built by the presi- 
dent's late husband, Pedro Joaquin Chamorro Cardenal. At the 
time of the transition, La Prensa was run by the president's 
daughter, Cristiana Chamorro de Lacayo, also the wife of Anto- 
nio Lacayo. Cristiana Chamorro's tight control over La Prensa 
and reported refusal to permit criticism of her mother's gov- 
ernment led to a rebellion among the editorial board and staff 
within a year after the 1990 election. The editorial staff, which 
included other family members, took the opportunity pre- 
sented by Cristiana Chamorro's official trip abroad with her 
mother in November 1990 to publish articles harshly critical of 
the government for its relations with Sandinista leaders. In Jan- 
uary the staff forced Cristiana Chamorro to resign as editor 
and removed Violeta Chamorro from the board of directors. 
The changes were seen as an attempt by the editorial staff to 
establish La Prensa as an independent paper rather than the 
official voice of the government. 

One of the two pro-Sandinista newspapers also moved in the 
1990s to a position more critical of the Chamorro government 
and the FSLN. Barricada, founded in 1979, with an estimated 
circulation of 20,000 in 1992, declared in early 1992 that it 
would no longer serve as the house organ of the FSLN and 
would instead take independent positions. Always regarded by 
many observers as the most professional of the three major 
newspapers, Barricada became the first public forum in which 
Sandinista leaders expressed internal disagreements in Febru- 
ary 1992. The shift in popular outlook may have been made 
possible by the division of powers among the Sandinista com- 
manders after their electoral defeat. Bayardo Arce Castaho 
became head of the FSLN's newspapers, radio stations, and 
television programs and was planning to establish a Sandinista 
television station. Significantly, the first disagreement aired in 
Barricada was between Arce and Daniel Ortega. 



181 



Nicaragua: A Country Study 

The third main daily, El Nuevo Diario, which had an esti- 
mated circulation of 40,000 to 45,000 in 1992, was founded in 
1980 by Xavier Chamorro Cardenal, one of Violeta Chamorro's 
brothers-in-law. It continued its uncritical support of the FSLN, 
despite expectations that with the end of the Contra war the 
newspaper would take more independent positions. 

Several weekly newspapers also were published in the early 
1990s. The Cosep group brought out La Nicaraguense; a group 
headed by former vice president Sergio Ramirez published El 
Seminario in the early 1990s; and a Sandinista group continued 
Semana Comica, a satirical tabloid. A new weekly newspaper, El 
Centroamericano, also appeared in Leon in the early 1990s. 

Foreign Relations 

The Chamorro government had great difficulty translating 
its electoral victory into increased foreign aid, although much 
of its foreign policy during its first years appeared aimed at that 
end. The high levels of international interest that attended the 
Sandinista years (1979-90) and the 1990 electoral process 
quickly waned after the Chamorro inauguration. The end of 
the Cold War and the transfer of dependence from the Soviet 
bloc to the United States created a dilemma for the Chamorro 
government, which viewed foreign assistance as crucial to its 
economic recovery and development, and which had acquired 
a popular image during the campaign as the political force that 
would attract foreign funding, particularly from the United 
States. The Chamorro administration sought to address the 
declining international interest, particularly in the United 
States, with an active international lobbying effort. The United 
States, which many Nicaraguans had believed would help Nica- 
ragua substantially if Chamorro were elected, became ambiva- 
lent about the Chamorro government when the UNO's policy 
of accommodation toward the Sandinistas persisted. As a 
result, the Chamorro government rapidly followed the path of 
other Latin American governments, seeking to diversify its for- 
eign relations and decrease its reliance on the United States, 
despite United States predominance in the country's economic 
and political affairs. 

By the end of the first year of the Chamorro government, 
Nicaragua was still highly dependent on foreign aid. Promises 
of foreign aid in 1990 totaled over US$700 million, more than 
twice the country's export earnings from its major products — 
coffee, cotton, and bananas. Nicaraguan experts estimated that 



182 



Government and Politics 



it would take three years of aid at that level to generate eco- 
nomic recovery and growth and to service a US$9.9 billion 
debt. Soon after the government took office, it estimated the 
country's foreign aid needs at US$907 million for 1990 and 
US$582 million for 1991. 

Relations with the United States 

Although it had provided substantial support to UNO forces 
for the elections, the United States did not prove a staunch and 
uncritically supportive ally of the Chamorro government. 
Although initially the United States gave signals that it was will- 
ing to support the Chamorro government strongly, the rela- 
tionship deteriorated when some officials within the United 
States government began to object to the Chamorro govern- 
ment's conciliatory policy toward the Sandinistas. 

On March 13, 1990, in a first gesture to the Chamorro gov- 
ernment-elect, United States president George H.W. Bush 
lifted the United States trade embargo imposed five years ear- 
lier. Bush also announced that he was presenting the United 
States Congress with a proposal for US$300 million in emer- 
gency supplemental appropriations for Nicaragua for the 1990 
fiscal year (FY — see Glossary), which would extend through 
September 30, 1990. He also asked the United States Congress 
to add more than US$200 million for Nicaraguan aid to the 
budget request for FY 1991, which began on October 1, 1990. 
The emergency supplemental proposal included US$128 mil- 
lion for immediate economic needs and US$75 million for 
other economic, social, and political programs. The United 
States also contributed US$50 million to help clear Nicaragua's 
US$234 million arrearages with international financial institu- 
tions, in the hope that other countries also would contribute 
sizable funds. For repatriation efforts, the Bush administra- 
tion's request included US$32 million for the demobilization 
and repatriation of the Contras and their families, and US$15 
million for the repatriation of other Nicaraguan refugees. 

In addition, Bush announced an immediate US$21 million 
aid package for the Chamorro government. The package 
included US$650,000 toward the Chamorro government's tran- 
sition period expenses, US$13 million in surplus foodstuffs, 
and US$7.5 million for Contra repatriation. The Bush adminis- 
tration also announced that it had begun the process of restor- 
ing Nicaragua's sugar quota, its eligibility for preferential 
treatment under the Caribbean Basin Initiative (CBI) and the 



183 



Nicaragua: A Country Study 

Generalized System of Preferences, and its access to benefits of 
the Export-Import Bank and the Overseas Private Investment 
Corporation. 

In its first action to assist President Chamorro, the United 
States Congress, although not acting as quickly as the 
Chamorro government wished on funds critical to its spring 
planting season, approved the emergency supplemental pack- 
age on May 24, 1990. For FY 1991, the United States Congress 
did not specifically earmark funds for Nicaragua, but it indi- 
cated in the report accompanying the foreign aid legislation 
that it expected to provide Nicaragua with as much as possible 
of the administration's US$200 million request for the 
country. (The United States Congress also specified that no 
funds were to be provided for Contras who had not disarmed 
and were not abiding by the terms of the April 1990 cease-fire.) 
Continuing resolutions from October 1, 1991, through Sep- 
tember 30, 1992, providing appropriations for FY 1992, allowed 
the Bush administration to continue funding Nicaragua at the 
FY 1991 US$200 million level, just under the administration's 
US$204.7 million request. The Bush administration obligated 
US$262.2 million in FY 1990, US$268.9 million in FY 1991, and 
an estimated US$185.5 million in FY 1992. 

As a result of the actions, during FY 1991 and FY 1992 Nica- 
ragua was the second-largest recipient of United States aid to 
Central America, behind El Salvador. In addition, in Septem- 
ber 1991, the Bush administration signed an agreement with 
Nicaragua cancelling US$259.5 million in bilateral debt to the 
United States. 

In exchange for its assistance, however, the United States 
expected the Chamorro government to adopt free-market 
reforms, privatize industries, restore property to former own- 
ers, and drop the international lawsuit that the Sandinista gov- 
ernment had brought against the United States for the Contra 
war. All these provisions proved highly problematic for the new 
government. Complicating the matter, the United States condi- 
tioned disbursements of certain obligated funds on progress 
toward fulfillment of economic objectives. At times, pressures 
from the Bush administration and members of the United 
States Congress for political reform in Nicaragua appeared to 
be prerequisites for further aid from the United States. 

United States discomfort with the continuing Sandinista 
leadership of the Nicaraguan military was highlighted in late 
1990 and early 1991. During this period, Salvadoran guerrillas 



184 



Government and Politics 



shot down two Salvadoran air force aircraft and a United 
States helicopter with Soviet surface-to-air missiles obtained 
from the Nicaraguan military. The accidents resulted in the 
deaths of three United States soldiers. Even though the 
Chamorro government arrested four officers in connection 
with the October 1990 sale of the missiles to the Salvadorans 
and the Nicaraguans said that the Salvadoran guerrillas would 
be forced to return unfired missiles, the incident accentuated 
United States fears that the Chamorro government was being 
used by the Sandinistas. Subsequent reports that Nicaraguan 
army soldiers had tried to smuggle arms and munitions to a 
Marxist group in Honduras, the assassination in Managua of 
former Contra leader Enrique Bermudez, and the Salvadoran 
guerrillas' continued use of Nicaragua as a safe haven exacer- 
bated United States concerns. For its part, the Nicaraguan gov- 
ernment objected to the United States request to the Soviet 
Union that it cut the supply of spare parts needed by the Nica- 
raguan army to maintain its helicopters and trucks. 

In April 1991, President Chamorro paid a state visit to the 
United States. She addressed a joint session of Congress in the 
hope of easing growing United States doubts about her admin- 
istration and obtaining a long-term commitment for United 
States aid. Although President Bush and the United States Con- 
gress praised and applauded President Chamorro, she received 
no commitments other than a promise that the United States 
would lead efforts to obtain aid to clear Nicaragua's arrearages 
with international financial institutions, opening the way for 
new support. 

At the time of President Chamorro's visit, a central issue in 
United States-Nicaraguah relations was unresolved. The 
United States wanted the Chamorro government to drop the 
suit that the Sandinista government had brought against the 
United States in the International Court of Justice (ICJ) on 
April 9, 1984. In the suit, the Sandinista government charged 
that the United States had violated international law in recruit- 
ing, training, arming, equipping, financing, supplying, and 
otherwise encouraging, supporting, aiding, and directing mili- 
tary and paramilitary actions in and against Nicaragua. The ICJ 
ruled against the United States on June 27, 1986. 

In its decision, the ICJ ruled, twelve to three, that the 
United States had violated obligations not to intervene in 
another state's affairs, not to use force against another state, 
not to violate the sovereignty of another state, and not to inter- 



185 



Nicaragua: A Country Study 

rupt peaceful maritime commerce. The ICJ also ruled that the 
United States had not abided by its 1956 Friendship, Com- 
merce, and Navigation Treaty with Nicaragua. The ICJ ordered 
the United States to make reparations to Nicaragua but left a 
first attempt at setting the form and amount of reparations to 
agreement between the two parties. Because the United States 
rejected the ICJ's decision, no attempts were ever made at 
agreement, and in the 1990 transition period the National 
Assembly passed a law requiring future governments to pro- 
ceed with the claim. Although the Chamorro government ini- 
tially resisted spending its political capital to meet United 
States demands to drop the claim, President Chamorro told 
President Bush during her April 1991 state visit that she had 
introduced legislation to the National Assembly to repeal the 
law. In June 1991, forty-nine to one after the Sandinista depu- 
ties had walked out, the UNO coalition in the National Assem- 
bly voted to revoke the law. The Chamorro government 
subsequently notified the ICJ that it was dropping the claim. 

Despite the Bush administration's public words of firm sup- 
port for the Chamorro government's ongoing economic 
reforms, the Nicaraguan government's relations with the San- 
dinistas were a continuing irritant and a cause for the Bush 
administration's difficulties in shaping and implementing its 
Nicaragua policy. As Nicaragua sought foreign funds to help 
sustain the army, in late 1991 the United States discouraged 
Taiwan from giving between US$2 million and US$3 million 
for nonlethal assistance to the Sandinista military. Earlier, the 
United States apparently had ignored a request from the Cha- 
morro government to help fund retirement and retraining 
benefits for 2,700 army officers. Without indications that the 
Sandinista military and police were firmly under President 
Chamorro's control, there seemed little prospect in 1993 that 
the United States would endorse her reconciliation policy. 

Relations with Central American Countries 

The elections in Nicaragua and the end of the Contra war, 
all achieved as part of the ongoing Central American peace 
process that began in 1983, raised hopes that Central Ameri- 
cans could turn to other issues of concern in the region. The 
Chamorro government maintained that it favored political and 
economic integration in Central America. In June 1990, 
President Chamorro joined the four other Central American 
presidents in a summit meeting in Antigua, Guatemala, part of 



186 



Government and Politics 



an ongoing series of presidential summits that had taken place 
since the Esquipulas II agreement of August 1987. The five 
presidents announced on June 17, 1990, that they had agreed 
to a plan for regional cooperation in trade, financing, invest- 
ment, and production. The plan included the revival of the 
Central American Common Market (CACM — see Appendix B) 
through a revision of tariff and nontariff barriers to trade. 

Central America sought to increase trade as an important 
step to economic recovery and long-term growth, both 
through broad and steady access to the United States market 
and through increasing trade within the Central American 
region. As mandated by the 1987 Esquipulas II accords, Central 
Americans took steps to advance integration efforts among 
themselves. Various efforts to bring all the countries together 
have resulted in some liberalization of trade. Nicaragua partici- 
pated in the first step in January 1991, when in a two-day meet- 
ing in Tuxtla, Mexico, the presidents of the five Central 
American countries signed an agreement outlining free-trade 
arrangements that would be phased in by December 31, 1996. 
This trade integration would start with each country bilaterally 
negotiating agreements by economic sector with Mexico. Sub- 
sequently, however, Nicaragua did not move with the same 
speed as other Central American countries toward regional 
economic integration; its delay was attributed to domestic eco- 
nomic conditions. Nicaragua also lagged on a regional political 
measure, namely, participation in the Central American Parlia- 
ment. In a September 1991 meeting in San Salvador, the presi- 
dents of Guatemala, El Salvador, and Honduras decided to 
hold an inaugural session of the parliament the following 
month. Nicaragua, however, had not yet held elections for the 
twenty delegates each country would send to the body; this 
delay was attributed to the cost of holding special elections and 
to domestic political reasons. The three participating countries 
gave Nicaragua, Costa Rica (which had not yet ratified the 
treaty), and Panama (which had expressed interest in joining 
regional integration measures) thirty-six months to take the 
steps necessary to participate. After Nicaragua finally held elec- 
tions for its delegates, the Central American Parliament, with 
delegates from Guatemala, El Salvador, Honduras, and Nicara- 
gua in attendance, had its first meeting in Esquipulas, Guate- 
mala, in 1993. 



187 



Nicaragua: A Country Study 

Relations with Other Countries 

The Chamorro government maintained relations with the 
Soviet Union and Cuba, despite their identification with the 
Sandinista party and cause. Even before the 1990 election 
results were officially announced, the Soviet Union pledged to 
recognize whoever won, as long as the elections were fair, and 
quickly acknowledged Chamorro as the winner. Cuba's govern- 
ment kept more than a diplomatic presence in Nicaragua after 
Chamorro's inauguration, and Cuban medical personnel 
remained in some areas to continue assisting with Nicaraguan 
health programs. 

Many countries provided economic assistance of various 
types, either through bilateral or Central American regional 
initiatives, although the amount of aid that the Chamorro gov- 
ernment received was criticized as falling far short of its needs. 
In June 1990, at a two-day Conference of Donors meeting in 
Rome, the Chamorro government was successful in securing 
pledges toward the US$350 million it had requested in emer- 
gency aid. This amount was in addition to what friendly coun- 
tries had already pledged. Nicaragua said that it needed 
US$220 million for social programs, infrastructure repair, and 
support for the producer sector, including small and medium 
producers, and US$130 million to finance the import of fuel 
and inputs for economic recovery. Pledges were made by 
nearly all of the thirty-four donors attending the conference, 
which included twelve European Community (now European 
Union) countries, the World Bank (see Glossary), and the 
International Monetary Fund (IMF — see Glossary). Most of the 
funds reportedly were contributed by Venezuela and Germany. 
Subsequently, in July 1990, Venezuela announced that it would 
resume oil exports to Nicaragua after the renegotiation of Nic- 
aragua's US$150 million petroleum debt incurred during the 
Sandinista years. Mexico and Venezuela had supplied oil to 
Nicaragua under the concessionary San Jose oil supply agree- 
ment, but sales had been suspended in 1985 for nonpayment. 

In September 1991, the Chamorro government rectified 
relations with multilateral institutions. It paid off US$270 mil- 
lion in arrearages to the World Bank and US$90 million to the 
Inter-American Development Bank (IDB), through donations 
and credits from the United States and other countries, includ- 
ing a bridge loan from Colombia, Mexico, Venezuela, and 
Spain. The same month, the IMF announced that it had 



188 



Government and Politics 



approved an eighteen-month, US$55.7 million loan to support 
the Chamorro government's economic reform program. 

A mid-March 1992 meeting of the "consultative group" of 
donor nations organized by the World Bank seemed promising 
as a source of substantial funds for 1992 and 1993. The govern- 
ment planned to use the funding for infrastructure, agricul- 
tural production, social programs, and balance-of-payments 
support. 

Asian countries also expressed interest in new relations with 
Nicaragua. Japan and the Republic of Korea (South Korea) 
principally investigated investment possibilities, although 
Japan also looked into the prospect of building a new transisth- 
mian canal across Nicaragua. Taiwan, which in 1990 had a 
political interest in reestablishing the diplomatic relations that 
the Sandinistas had broken in reaching out to China, offered 
not only substantial investments but also low-interest loans. 
However, Taiwanese plans to construct a sawmill and to manu- 
facture plywood and veneers in the northeast to ship to United 
States and European markets ran afoul of Nicaraguan environ- 
mentalists. 

Despite great strides taken in the previous several years, Nic- 
aragua in late 1993 still had many hurdles to overcome in insti- 
tutionalizing its democracy. The elections of 1990 were the first 
in over a half century when government control peacefully 
transferred from one party to another in fair elections. Plans 
for the next elections in 1996 were proceeding, and the coun- 
try's largest party, the FSLN, showed promising signs of moving 
from its revolutionary and authoritarian past to a genuine dem- 
ocratic party. Whether these new trends would continue and 
would take hold at the grassroots level, replacing the centuries- 
old legacy of dictators and revolution, remained to be seen. 

* * * 

Post-Sandinista Nicaragua may fall into the same academic 
literature void as pre-Sandinista Nicaragua, with little reliable 
English-language public source material analyzing the political 
situation. Scholarly works in print on Nicaragua's internal poli- 
tics in the postelectoral period were limited as of December 
1993. All suffer from lack of study of the UNO parties, which 
were disregarded by academe during the Sandinista years 
much as the opposition was ignored during the Somoza years. 
Until that deficit is corrected, analysis of the politics of the 
Chamorro years is likely to remain superficial and/ or suscepti- 



189 



Nicaragua: A Country Study 

ble to political bias. A worthwhile general overview of Nicara- 
gua in the early postelectoral period is contained in the 
chapter on Nicaragua in Tom Barry's Central America Inside Out: 
The Essential Guide to Its Societies, Politics, and Economies. An 
informed discussion of the politics of the Chamorro govern- 
ment's first eight months is "Nicaragua in Transition," an arti- 
cle in Current History, by Jennifer McCoy, who served as the 
Carter Center's representative in Nicaragua during the preelec- 
toral and postelectoral period. 

Other studies that bear on the political situation are more 
specifically focused. Studies of the election itself are included 
in Philip J. Williams's "Elections and Democratization in Nica- 
ragua: The 1990 Elections in Perspective," in the Journal of Inter- 
American Studies and World Affairs. Family relations in Nicara- 
guan politics from the 1800s through the early Chamorro years 
are treated in "Family Affairs: Class, Lineage and Politics in 
Contemporary Nicaragua," by Carlos Maria Vilas, in the Journal 
of Latin American Studies. 

The Sandinistas continue to be a focus of study. Latin Ameri- 
can Perspectives, a publication of the pro-Sandinista North 
American Congress on Latin America, devoted an entire post- 
electoral volume, The Sandinista Legacy: The Construction of 
Democracy, to the Sandinistas. New York Times reporter Mark 
Uhlig, who covered Nicaragua during the Sandinista years, has 
written an extensive postelectoral analysis of the FSLN in "Nica- 
ragua's Permanent Crisis: Ruling from Above and Below," in 
Survival. A forthcoming book by Rose J. Spalding, Capitalists 
and Revolution in Nicaragua, will deal with the politics of the 
Sandinista years and the Chamorro government. (For further 
information and complete citations, see Bibliography.) 



190 



Chapter 5. National Security 



i 




Members of the Sandinista People's Army, Nicaragua's national army 



FREE ELECTIONS IN NICARAGUA in 1990 ended eleven 
years of government by the Marxist Sandinista National Libera- 
tion Front (Frente Sandinista de Liberacion Nacional — FSLN), 
but under the new government, the Sandinista People's Army 
(Ejercito Popular Sandinista — EPS) is still controlled by the 
Sandinistas (see Glossary). The commanding general of the 
EPS, Humberto Ortega Saavedra, a former member of the San- 
dinista directorate, and his general staff, all Sandinistas, func- 
tion independently of civilian authority, although President 
Violeta Barrios de Chamorro is nominally commander in chief 
and minister of defense. 

Under the Sandinista administration (1979-90), the EPS 
grew from a force of a few thousand guerrillas to an army that 
at its peak had a strength of around 97,000 troops, augmented 
by militia and reserve forces. The estimated number of total 
active-duty personnel was 134,000. Since the restoration of 
peace, the armed forces have undergone comprehensive 
reform. Their strength was cut back to about 15,000 at the end 
of 1993, the militia has been disbanded, and obligatory mili- 
tary service has been terminated. During the 1980s, armor, 
heavy weapons, and aircraft supplied by the Soviet Union and 
its allies enabled the Sandinistas to field the most powerful 
army in Central America (see Glossary). Although some of 
these items have been sold, Soviet weaponry still predominates 
in the inventory of the depleted army. However, much of it is 
not in service because of lack of maintenance and personnel to 
operate it. 

The conclusion of the civil war in 1990 was accompanied by 
the demobilization of some 22,000 Contra (short for contrarevo- 
lucionario — see Glossary) fighters of the Nicaraguan Resistance. 
Nevertheless, violence in the heavily armed society remains 
commonplace. The Chamorro government has not been able 
to deliver on many of its promises of land and credits to the 
former Contras to facilitate their reintegration into Nicaraguan 
society. Several thousand of them — known as Recontras — have 
formed armed bands in rural areas. Their targets are often 
local Sandinista officials and Sandinista farm cooperatives. Dis- 
gruntled veterans of the EPS, known as Recompas, have 
formed similar groups in protest against the government's fail- 
ure to relieve their economic distress. 



193 



Nicaragua: A Country Study 

In 1993 government amnesties, offers of payments for arms, 
and assurances of fulfillment of campaign promises reduced 
the number of Recontras and Recompas threatening the coun- 
tryside. Political murders and kidnappings remain serious 
threats in the polarized society, although the level of violence 
has eased significantly since the 1970s and 1980s. The National 
Police and the criminal justice system, however, are not effec- 
tive in arresting and convicting persons responsible for the law- 
lessness. Harassment of former resistance members by local 
security forces is a source of friction, but few such crimes by the 
EPS or police result in any punishment. Under pressure from 
domestic and international critics, Chamorro has removed a 
number of high police officials to reduce Sandinista control 
over law enforcement, has replaced many Sandinista judges in 
the judicial system, and has sought to gain control over the 
state security apparatus, which had been one of the principal 
source of human rights abuse during the Sandinista era. 

Military Heritage 

During a prolonged period of political turmoil after the dis- 
solution of the United Provinces of Central America in 1837, 
Nicaragua was rent by power rivalry between conservative and 
liberal political factions. The private armies of the main politi- 
cal factions, composed of officers of European descent com- 
manding illiterate mestizos who had been pressed into service, 
were the only organized military forces in the country. The 
new country's main threat to its borders arose from Britain's 
continuing efforts to exercise domination over Nicaragua's 
Caribbean coast area, but the risk of armed confrontation with 
the United States persuaded the British to retreat from their 
attempts to formalize control of the area and to negotiate the 
Clayton-Bulwer Treaty, in which both countries agreed not to 
claim exclusive control over the region (see National Indepen- 
dence, ch. 1). 

In 1854 and 1855, bloody fighting between liberal forces, 
aided by neighboring Honduras, and conservatives, aided by a 
conservative government in Guatemala, provided an opening 
for the United States adventurer William Walker, who landed 
in Nicaragua with a small band of followers (see Foreign Inter- 
vention (1850-68), ch. 1). Walker's power quickly grew, but 
after he installed himself as president, both contending politi- 
cal factions joined together with the armies of other Central 
American nations to drive Walker out. The conflict was pro- 



194 



National Security 



longed and bitter, but in 1857, finally facing defeat, Walker and 
his remaining followers were evacuated under a truce orga- 
nized by the United States Navy. 

The first effort to build a professional military establish- 
ment did not occur until the administration of liberal presi- 
dent Jose Santos Zelaya (1893-1909). The plan was to raise an 
army of 2,000 regulars organized into sixteen infantry compa- 
nies, augmented by cavalry, artillery, and engineering units. A 
flotilla of five armed vessels was also assembled. The envisaged 
strength was never reached, and the size of the army dwindled 
to fewer than 500 in the years following the arrival of United 
States marines, who were sent to Nicaragua in 1912 to suppress 
a revolt. 

After the marines' last contingent, the legation guard, was 
withdrawn in 1925, a small United States training mission was 
introduced to organize a National Constabulary intended to 
replace the army and National Police. However, a coup and the 
outbreak of full-scale civil war led to a revival of the Nicaraguan 
army. The renewal of fighting precipitated another interven- 
tion by the United States that lasted from 1926 to 1933 (see 
United States Intervention, ch. 1). 

National Guard, 1927-79 

The long years of strife between the liberal and conservative 
political factions and the existence of private armies led the 
United States to sponsor the National Guard as what was 
intended to be an apolitical institution to assume all military 
and police functions in Nicaragua. The marines provided the 
training, but their efforts were complicated by a guerrilla 
movement led by Augusto Cesar Sandino. Sandino opposed 
the United States-backed military force, which was composed 
mostly of his political enemies, and continued to resist the 
marines and the fledgling National Guard from a stronghold in 
the mountainous areas of northern Nicaragua. 

Upon the advent of the United States Good Neighbor Policy 
in 1933, the marines withdrew from Nicaragua, but they left 
behind the best-organized, -trained, and -equipped military 
force that the country had ever known. Having reached a 
strength of about 3,000 by the mid-1930s, the guard was orga- 
nized into company units, although the Presidential Guard 
component approached battalion size. Despite hopes for an 
apolitical force, however, the National Guard soon became the 
personal tool of the Somoza dynasty. Expanded to more than 



195 



Nicaragua: A Country Study 

10,000 during the civil war of 1978-79, the guard consisted of a 
reinforced battalion as its primary tactical unit, a Presidential 
Guard battalion, a mechanized company, an engineer battal- 
ion, artillery and antiaircraft batteries, and one security com- 
pany in each of the country's sixteen departments. 

The National Guard's main arms were rifles and machine 
guns, later augmented by antiaircraft guns and mortars. 
Although Nicaragua was not actively involved in World War II, 
it qualified for United States Lend-Lease military aid in 
exchange for United States base facilities at Corinto on the 
Pacific coast. Additional shipments of small arms and transpor- 
tation and communication equipment followed, as well as 
some training and light transport aircraft. United States mili- 
tary aid to the National Guard continued under the Rio de 
Janeiro Treaty of Mutual Defense (1947), but stopped in 1976 
after relations with the administration of Anastasio Somoza 
Debayle (1967-72, 1974-79) worsened. Some United States 
equipment of World War II vintage was also purchased from 
other countries: Staghound armored cars and M4 Sherman 
medium tanks from Israel and F-51 Mustang fighter aircraft 
from Sweden. 

Except for minor frontier skirmishes with Honduras in 1957 
over a border dispute, the National Guard was not involved in 
any conflict with its neighbors. In its only mission outside the 
country, one company participated in the peacekeeping force 
of the Organization of American States (OAS) in the Domini- 
can Republic in 1965. The guard's domestic power, however, 
gradually broadened to embrace not only its original internal 
security and police functions but also control over customs, 
telecommunications, port facilities, radio broadcasting, the 
merchant marine, and civil aviation. 

Upon the departure of the United States marines in 1933, 
General Anastasio Somoza Garcia was selected by the presi- 
dent-elect of Nicaragua as first Nicaraguan commander of the 
National Guard. Although initially regarded as a malleable 
compromise candidate, Somoza soon indicated that he would 
exploit his position as head of the guard to consolidate power 
in what became the Somoza dynasty (see The Somoza Era, 
1936-74, ch. 1). Through its control of all security, police, and 
intelligence functions, the guard became far more than simply 
a military institution. Command of the National Guard always 
remained in the hands of Somoza family members, and key 
officers were promoted mainly on the basis of personal loyalty 



196 



Augusto Cesar 
Sandino 




to the ruling family. This loyalty was reinforced through kick- 
backs, perquisites, and special opportunities for personal gain 
that led to a pervasive system of corruption. At the time of 
Anastasio Somoza Garcia's assassination in 1956, his oldest son, 
Luis Somoza Debayle, became president and his second son, 
Anastasio Somoza Debayle, took over as commander of the 
National Guard. When Luis Somoza Debayle's health deterio- 
rated in 1967, control of the presidency passed to Anastasio 
Somoza Debayle. 

The National Guard's close association with the Somoza 
family and its instinct for self-preservation through protection 
of the Somoza dynasty resulted in increasing alienation of large 
segments of the Nicaraguan population. This alienation was 
exacerbated by repressive measures, including the strafing of 
cities, and the ruthless urban warfare employed by the guard 
during the two years of fighting that preceded the ouster of 
Anastasio Somoza Debayle. As a result, many Nicaraguans saw 
the struggle of the FSLN against the government as an anti- 
National Guard crusade as well as an anti-Somoza crusade. 

Sandinista Guerrilla Movement, 1961-79 

The FSLN was officially founded in Honduras on the sym- 
bolic date of July 26, 1961, the eighth anniversary of the 



197 



Nicaragua: A Country Study 

launching of the Cuban Revolution by Fidel Castro Ruz. The 
FSLN operated at first in the mountainous region that forms 
the border between Honduras and Nicaragua. Early successes 
were few, however, and the hardships and sheer effort of surviv- 
ing led to discontent and desertions. Between 1970 and 1974, 
the FSLN struggled to broaden its bases of support by conduct- 
ing guerrilla operations in the countryside while recruiting 
new supporters in the cities. Its rural guerrilla tactics were pat- 
terned after those of Castro's army, and FSLN forces were 
trained in Cuba. The tactics combined rural insurgency with 
popular insurrection, a mix which proved the key element in 
the FSLN's eventual victory. 

For many observers, the FSLN first became a force to be 
reckoned with when it executed a spectacular raid and hostage- 
taking mission at a reception for the United States ambassador 
in Managua in December 1974 (see The End of the Anastasio 
Somoza Debayle Era, ch. 1). Subsequently, the Anastasio 
Somoza Debayle administration was obliged to accede to 
humiliating FSLN demands for ransom and political freedom 
for fourteen FSLN prisoners. The National Guard followed 
with a major counteroffensive that reduced armed resistance in 
the countryside. The FSLN remained on the defensive until 
1977, but the guard's harsh reprisals caused popular feeling to 
swing even more toward the Sandinistas. 

The seizure of the National Palace by a small group of San- 
dinistas in August 1978 sparked a mass uprising in the follow- 
ing month. The uprising was a turning point in the struggle to 
overthrow Anastasio Somoza Debayle. The FSLN no longer was 
fighting alone but rather was organizing and controlling a 
national insurrection of citizens eager to join the anti-Somoza 
movement. Hard-core Sandinista guerrillas numbered perhaps 
2,000 to 3,000; untrained popular militias and foreign support- 
ers added several thousand more to this total. Although the 
"first offensive," September 1978, declined toward the end of 
the year, fighting did not completely stop. The FSLN mounted 
its "final offensive" in May 1979, capturing a number of cities in 
June and launching a three-pronged assault against Managua 
in early July. Anastasio Somoza Debayle, strongly urged to do so 
by the United States, resigned on July 16 and fled the country; 
the National Guard collapsed two days later. 

Sandinista People's Army, 1979-90 

Sandinista ranks had ballooned during the final weeks of 



198 



National Security 



the insurrection with the addition of thousands of untrained 
and undisciplined volunteers. These self-recruits, who had 
access to weapons, were the source of considerable crime and 
violence. By late 1979, the situation was clearly deteriorating; 
petty crime mounted and some Sandinistas were abusing their 
authority for personal gain. To end the chaotic situation and 
consolidate political power, FSLN combatants were regrouped 
into a conventional army framework. At its core were 1,300 
experienced guerrilla fighters. Most of the remainder were 
members of the popular militias and others who had played 
some role in the defeat of Somoza. Cuban military personnel 
helped to set up basic and more advanced training programs 
and to advise the regional commands. The new army, known as 
the EPS, was placed under the command of Humberto Ortega, 
one of the nine FSLN commanders and brother of Daniel Jose 
Ortega Saavedra, the San dinista junta coordinator. 

The Sandinistas announced initially that their goal was to 
build a well-equipped professional military of some 25,000. 
Their primary missions were to deter attacks led by the United 
States, prevent a counterrevolutionary uprising, and mobilize 
internal support for the FSLN. The strength of the EPS 
increased steadily during the Contra war in the 1980s. At the 
time the peace accords for the war went into effect in 1990, the 
EPS's active-duty members numbered more than 80,000. Sup- 
plemented by reservists and militia, the Nicaraguan armed 
forces had an overall fighting strength of more than 125,000. 

The buildup of the regular army depended at first on volun- 
tary enlistments, but later in 1983 a universal conscription sys- 
tem, known as Patriotic Military Service, was adopted. Males 
between the ages of seventeen and twenty-six were obligated to 
perform two years of active service followed by two years of 
reserve status. Service by women remained voluntary. Manda- 
tory conscription was bitterly resented. Thousands of youths 
fled the country rather than serve in the armed forces, and 
antidraft protests were widespread. The unpopularity of the 
draft was believed to have been a large factor in the Sandinista 
election defeat in 1990. 

Inheriting only the battered remnants of the equipment of 
Somoza's National Guard, the Sandinistas eventually acquired 
enough Soviet heavy and light tanks and armored personnel 
carriers (APCs) to form five armored battalions. The Soviets 
and their allies delivered large amounts of other equipment, 
including 122mm and 155mm howitzers, 122mm multiple 



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Nicaragua: A Country Study 

rocket launchers, trucks, and tank carriers. A mix of infantry 
weapons employed by the Sandinista guerrillas was gradually 
replaced by Soviet AK-47 assault rifles in the EPS and eventu- 
ally among combat elements of the militia as well. 

The Sandinistas upgraded the modest air force left by the 
National Guard after sending personnel to Cuba and East 
European countries for pilot and mechanic training. The most 
important acquisitions were Soviet helicopters for battlefield 
transport and assault missions. Although pilots were trained 
and runways constructed in preparation for jet fighters, nei- 
ther the Soviet Union nor France was willing to extend credits 
for the purchase of modern MiG or Mirage aircraft. The 
United States warned that the introduction of sophisticated jet 
fighters might lead to retaliatory strikes because of the poten- 
tial threat to the Panama Canal. 

In an escalation of tensions, the United States mined Nica- 
raguan harbors and attacked boats in ports. In response, the 
Nicaraguan government, to defend against further attacks on 
harbors and shore installations, replaced the old patrol boats 
left by the National Guard with armed patrol craft and small 
minesweepers. 

Sandinista People's Militia 

Following the example of Cuba, the Nicaraguan govern- 
ment established the Sandinista People's Militia (Milicia Popu- 
lar Sandinista — MPS) to augment the regular troops and to 
gain the services of enthusiastic supporters of the revolution 
who could not be accommodated in the EPS. The militia repre- 
sented both a massive political mobilization and the primary 
means of defending the countryside against the forces of the 
Nicaraguan Resistance. Individual militias received weekend 
training in basic infantry weapons and were assigned as guards 
in sensitive installations or as neighborhood night watches. A 
typical militia battalion of 700 persons consisted of five infantry 
companies and various support units. 

The principal weapons of the MPS were older-model rifles 
and machine guns and mortars. Militia members displaying 
aptitude during weekend training sessions were selected for 
several months of full-time training, followed by up to six 
months of service in the field. During 1982 and 1983, the mili- 
tia had primary responsibility for border defense and sustained 
heavy casualties, while the regular army was concentrated at 
permanent bases. After the installation of the draft in 1983 



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Triumphant Sandinistas greeted by crowds in Managua, 

July 19, 1979 
Courtesy Susan Meiselas Magnum 

enabled the EPS to widen its operations, the mobilized militia 
functioned mainly as a protector of rural communities. The 
FSLN claimed that 250,000 persons had received some form of 
military training, of whom 100,000 were mobilized in active 
units. 

Before Anastasio Somoza Debayle's overthrow, women had 
constituted up to 40 percent of the ranks of the FSLN and 6 
percent of the officers. Six women held the rank of guerrilla 
commander in the late 1970s. After the Sandinista victory, how- 
ever, women were gradually shifted to noncombatant roles or 
to the Sandinista Police (Policfa Sandinista — PS). Many women 
fighters resisted the redeployment, and their role became an 
issue. As a compromise, seven all-women reserve battalions 
were formed, but these were gradually converted into mixed 
battalions. Women's mobilization continued in other forms. 



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Nicaragua: A Country Study 

Women constituted 50 percent of the Sandinista Defense Com- 
mittees (Cornites de Defensa Sandinista — CDS) organized in 
the neighborhoods and up to 80 percent of Revolutionary Vigi- 
lance Patrols, volunteers who carried out nighttime watches in 
urban neighborhoods and at industrial sites. 

Foreign Influences and Assistance 

The influence of the United States on the National Guard 
was significant for many years. Between 1950 and 1976, when 
military relations were cut off, the total value of United States 
military aid was US$18.2 million. In addition, some 5,400 mem- 
bers of the guard received training in the United States. The 
National Guard managed to obtain some equipment and train- 
ing assistance from Israel during the final years of the Somoza 
era to compensate for the loss of United States aid. 

Cuba was the predominant influence on the FSLN during 
the period from its inception until July 1979. The Castro gov- 
ernment provided advice, training, money, and moral support 
as well as some Soviet-made weapons. Captured National 
Guard weapons were at first used to arm the FSLN guerrillas, 
but as the struggle to overthrow Somoza escalated in the late 
1970s, purchases on the international arms market reached the 
Sandinistas through Panamanian ports, transiting Costa Rica, 
which acquiesced in arms transshipment. 

In addition to Panama and Costa Rica, Venezuela and other 
nations of the Andean Pact aided the anti-Somoza effort in the 
late 1970s in a variety of ways. A Simon Bolivar Brigade, formed 
in Colombia but also including sympathizers from a number of 
countries, participated in limited combat alongside the FSLN. 
Although both the Nicaraguan and Cuban governments down- 
played the level of Cuban influence, the Cuban role was clearly 
paramount. 

FSLN leaders requested military aid from the United States 
in mid-1979, but it was uncertain how serious their request was 
because they had already accepted Cuban military advisers. 
Although the request for military aid was rejected, the United 
States did offer to provide some training in the United States 
and to supply advisers, instructors, and some assistance in non- 
combat areas. All of these offers were refused by the Sandinista 
leaders. The United States administration criticized France for 
proceeding with a sale of US$15.8 million in equipment — con- 
sisting mainly of two patrol boats, two helicopters, trucks, and 
rocket launchers. As a result of the United States stance, no fur- 



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National Security 



ther military equipment was transferred from Western suppli- 
ers. 

In March 1980, a high-level delegation that included Minis- 
ter of Defense Humberto Ortega traveled to Moscow and 
signed a variety of agreements. Both Nicaraguan and Soviet 
officials hotly denied that these accords included secret mili- 
tary agreements. The FSLN leaders also visited Bulgaria and 
the German Democratic Republic (East Germany); both coun- 
tries subsequently provided military advisers, and some Nicara- 
guan pilots were trained in Bulgaria. 

Deliveries of Soviet weapons began soon after the visit to 
Moscow. They included the T-55 heavy tank mounted with a 
100mm gun, which was an older model of a tank with capabili- 
ties that were limited under Nicaraguan conditions. Heavy 
artillery and multiple rocket launchers, far surpassing in range 
and firepower all other artillery in the region, also were deliv- 
ered. APCs, jeep-like vehicles, trucks, tanker trucks, and mobile 
workshops followed and added mobility to the EPS. The Soviet 
Union also supplied helicopters to the Nicaraguan air force, 
giving the EPS the means to respond more rapidly to attacks 
and raids by the Nicaraguan Resistance. The United States 
Department of State estimated that the Soviet Union and its 
allies delivered some 120,000 tons of military and military- 
related equipment, valued at US$3.3 billion, between 1980 and 
1990. In most cases, deliveries consisted of older equipment 
provided at discounted prices under generous terms or as 
donations. 

Criticizing the Soviet-assisted buildup of the EPS, United 
States officials underscored the threat of Nicaragua's growing 
military potential to its neighbors. Other observers regarded 
the newly acquired weaponry as essentially defensive, noting 
that it added little to Nicaragua's capacity to wage war beyond 
its borders. 

Prior to July 1979, Panamanian ties with the FSLN were 
strong, and Panama's support of the Sandinistas included vol- 
unteers in a Panamanian brigade that fought alongside the 
Sandinistas. A group of Panamanian National Guard officers 
arrived in Managua in late 1979 to offer advisory services, but 
found that Cubans had already arrived and were serving as the 
key advisers to the EPS and security organs. Venezuela briefly 
considered providing training for the nascent Sandinista air 
force but declined because of the strong Cuban presence. The 
United States claimed that as many as 3,500 Cuban military 



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Nicaragua: A Country Study 

and security advisers were serving in Nicaragua by late 1985, 
although other sources said there were far fewer. Cuban offic- 
ers were present during combat operations and served as pilots 
in some cases, but Nicaragua denied that they actively partici- 
pated in the fighting. Of thousands of Soviet and Eastern Euro- 
pean personnel in Nicaragua, only about thirty to forty Soviet 
citizens, fifty to sixty East Germans, and a few Bulgarians served 
with the Nicaraguan military. They mainly provided training in 
the use and maintenance of Soviet equipment. 

The impact of the Sandinista success and the subsequent 
direction taken by the FSLN was considerable, especially in 
Central America and the Caribbean region. The FSLN victory, 
in effect, delivered a message to conservative, military-domi- 
nated administrations, putting them on notice that they could 
afford to ignore similar groups in their countries only at their 
own peril. In 1980 and 1981, the FSLN leadership did not hesi- 
tate to proclaim Sandinista moral support for guerrilla move- 
ments in Central America, especially in El Salvador, but was 
circumspect when issues of direct arms and military assistance 
were raised. In 1981 the United States cut off economic assis- 
tance to Nicaragua after publishing an extensive and contro- 
versial white paper claiming that Soviet and Cuban arms flowed 
through Nicaragua to the Salvadoran guerrillas of the Fara- 
bundo Marti National Liberation Front (Frente Farabundo 
Marti de Liberation Nacional — FMLN). There appeared to be 
no question, however, that FMLN guerrillas were trained by 
Nicaraguan and Cuban officers in Nicaragua. When the United 
States stated that Nicaragua's aid to the Salvadoran rebels was 
the reason for United States support for the Nicaraguan Resis- 
tance, the Nicaraguan government took steps to curtail the 
outward flow of weapons. 

United States government charges that the FSLN supported 
rebel movements in other nations were not fully substantiated, 
in spite of repeated reports of Nicaraguan links with Guatema- 
lan and South American insurgent groups. In 1993 the issue of 
the FSLN's ties with guerrillas and terrorists surfaced again 
when an arms cache exploded in Managua. The blast revealed 
tons of weapons, including Soviet surface-to-air missiles, assault 
rifles, and machine guns, plus ammunition and explosives. 
Ownership of the weapons was admitted by a faction of the 
FMLN, which had falsely informed the United Nations (UN) 
that its weapons had been destroyed in conformity with a UN- 
mediated peace process. In addition, many documents, includ- 



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National Security 



ing false passports, were discovered. The discovery suggested 
that a radical faction of Sandinistas with ties to left-wing Latin 
American and European terrorists continued to operate clan- 
destinely. A second cache of explosives and light arms ap- 
peared soon afterward, linking the Sandinistas to Guatemalan 
guerrilla groups. An international investigation, however, 
found no evidence of active ties to international criminal or 
terrorist groups. 

The Nicaraguan Resistance 

Anti-Sandinista exile groups, backed by the United States 
Central Intelligence Agency (CIA), began in the spring of 1981 
to plan paramilitary operations against the government of Nic- 
aragua. A year later, new fighting was well under way. Together 
referred to as the Nicaraguan Resistance, the two main antigov- 
ernment organizations were the Nicaraguan Democratic Force 
(Fuerza Democratica Nicaraguense — FDN) and the Demo- 
cratic Revolutionary Alliance (Alianza Revolucionaria 
Democratica — Arde). Based in Honduras, the FDN consisted 
largely of former members and officers of the National Guard 
in alliance with other groups, deserters from the FSLN militia, 
and disgruntled Miskito. According to a 1985 United States 
Congressional study, forty-six of the forty-eight command posi- 
tions in the FDN were held by former members of the National 
Guard. In lower units, the majority of group and detachment 
leaders had no previous National Guard service. Ordinary sol- 
diers were mainly disaffected peasants or peasant mercenaries 
with no guard affiliation. As the fighting continued, many field 
commanders were promoted from the ranks. Miskito, Sumo, 
and Rama (Misura), a right-wing Miskito group of 1,500 to 
3,000 indigenous troops led by a former Somoza agent, oper- 
ated in coordination with the FDN. Misurasata, a Costa Rican- 
based Miskito group under Brooklyn Rivera Bryan that was 
aligned with Arde, fought for Caribbean coast autonomy rather 
than against the Sandinista government. 

Beginning with raids across the border, the FDN had by 
1983 established a foothold along the Honduran border in the 
northern section of easternmost Zelaya Department. The FDN 
was estimated to have a strength of 10,000 to 15,000 persons by 
mid-1984. Advisory, financial, and material help from the CIA 
was crucial. According to the United States Department of 
State, military and nonmilitary assistance between 1982 and 
1990 amounted to US$300 million. This figure did not include 



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Nicaragua: A Country Study 



an additional US$100 million gathered by the United States 
National Security Council, and aid solicited from private orga- 
nizations and foreign governments, much of it devoted to 
weaponry. 

Operating out of Costa Rica, Arde included forces from sev- 
eral factions, including those of Eden Pastora Gomez (also 
known as Comandante Cero — Commander Zero). A hero of 
the 1978 FSLN takeover of the National Palace, Pastora had 
later become disenchanted with the FSLN. The Arde forces, 
which consisted of about 3,000 troops, had produced one well- 
publicized success by briefly occupying the town of San Juan 
del Norte. However, a split developed between Arde leaders in 
1984 when Pastora pulled his forces out of Arde over the issue 
of unification with the FDN, and as a result the FDN's military 
campaign was severely weakened. 

The funding of arms for the Contras, as members of the 
Nicaraguan Resistance had come to be known, was cut off by 
the United States Congress in 1984, contributing to a decline 
in Contra fortunes. The Contras were reduced to hit-and-run 
raids targeting civilian installations and sabotaging infrastruc- 
ture. Subsequently revitalized as arms purchased with private 
funds reached them, the Contras were able to carry out numer- 
ous attacks on isolated military units and occupied the north- 
east border region with Honduras and some rural moun- 
tainous areas. Yet they failed to establish a liberated zone where 
they could set up a provisional government. The Contras 1 bru- 
tal practices of attacks on rural cooperatives, villages, and clin- 
ics, often involving the deaths of civilians and the torture and 
killing of Sandinista officials and soldiers, brought accusations 
that the Contras were conducting a deliberate campaign of ter- 
rorism. 

By mid-1985, the military balance began to shift to the FSLN 
forces, which had been strengthened by draft call-ups and 
improved use of militia units. With the EPS numbering 40,000 
troops and the active-duty militia 20,000, offensive operations 
of the government forces drove most of the Contras back into 
Honduras. Long-range artillery shelled suspected Contra 
camps just inside the Honduran border. Many Nicaraguan vil- 
lagers in the war zones were evacuated to resettlement camps 
to give the government free-fire zones and to deny the Contras 
local support and intelligence. As part of its shift in tactics, the 
EPS formed thirteen Irregular Warfare Battalions (Batallones 
de Lucha Irregulares — BLIs) to carry on the fight against the 



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National Security 



Contras. The BLIs were lightly armed, highly mobile, quick- 
reaction forces trained in counterguerrilla tactics. The use of 
Soviet-supplied helicopters to transport the BLIs added to the 
military pressure against the Contras. 

Boosted by the resumption of weapons and ammunition 
supplies from the United States in 1986, the Contras mounted 
new offensives, briefly capturing a number of remote towns 
and cutting highway links. Some EPS helicopters were shot 
down with newly acquired shoulder-fired missiles. Although 
damaging to the Nicaraguan economy and costly in lives, the 
Contra campaign never posed a serious military threat to Man- 
agua or other large cities. The FDN claimed to have 10,000 of 
its 16,000 fighters operating inside Nicaragua; the FSLN said 
that there were only 6,000. 

Although in 1988, while peace negotiations were under way, 
the United States Congress rejected the request of President 
Ronald Reagan's administration (1981-89) for additional mili- 
tary aid to the Contras, it approved nonlethal "humanitarian" 
aid that enabled the Contra forces to remain intact. After inter- 
nationally monitored Nicaraguan elections were set for Febru- 
ary 1990, five Central American presidents agreed that a new 
organization, the International Support and Verification Com- 
mission of the Organization of American States, would oversee 
the voluntary demobilization, repatriation, or relocation of the 
Contra forces over a ninety-day period. The demobilization 
process began on April 1, 1990. 

Under the terms of the accords, former members of the 
resistance would have their confiscated property restored, be 
eligible for grants for rehabilitation and training, and receive 
parcels of land and credits enabling them to settle in autono- 
mous rural development zones. Widows of slain Contras were 
to be provided with pensions. These commitments were, at 
best, only partially fulfilled. Many Contras who settled in the 
development zones soon abandoned them because the regions 
lacked the necessary infrastructure. Some ex-Contras also 
returned to their former homes as fears of Sandinista retribu- 
tion subsided. 

Armed Forces after 1990 

Under an agreement between President-elect Chamorro of 
the National Opposition Union (Union Nacional Opositora — 
UNO) and the defeated FSLN party, General Humberto 
Ortega, former minister of defense and commander in chief of 



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Nicaragua: A Country Study 




208 



National Security 



the EPS under the Sandinistas, remained at the head of the 
armed forces (see fig. 13). By a law that took effect in April 
1990, the EPS became subordinate to President Chamorro as 
commander in chief. Chamorro also retained the Ministry of 
Defense portfolio. Chamorro's authority over the EPS was, 
however, very limited. There were no Ministry of Defense 
offices and no vice ministers to shape national defense policies 
or exercise civilian control over the armed forces. Under the 
Law of Military Organization of the Sandinista Popular Army 
enacted just before Chamorro's election victory, Humberto 
Ortega retained authority over promotions, military construc- 
tion, and force deployments. He contracted for weapons pro- 
curement and drafted the military budget presented to the 
government. Only an overall budget had to be submitted to the 
legislature, thus avoiding a line-item review by the National 
Assembly. 

Sandinista officers remained at the head of all general staff 
directorates and military regions. The chief of the army, Major 
General Joaquin Cuadra Lacayo, continued in his pre-Chamo- 
rro position. Facing domestic pressure to remove Humberto 
Ortega and the risk of curtailment of United States aid as long 
as Sandinistas remained in control of the armed forces, Cha- 
morro announced that Ortega would be replaced in 1994. 
Ortega challenged her authority to relieve him and reiterated 
his intention to remain at the head of the EPS until the army 
reform program was completed in 1997. This date was later 
advanced to the first half of 1995. 

The army reform measures were launched with deep cuts in 
personnel strengths, the abolition of conscription, and dis- 
banding of the militia. The size of the army declined from a 
peak strength of 97,000 troops to an estimated 15,200 in 1993, 
accomplished by voluntary discharges and forced retirements. 
Under the Sandinistas, the army general staff consisted of 
numerous branches and directorates: artillery, combat readi- 
ness, communications, Frontier Guards, military construction, 
intelligence, counterintelligence, training, operations, organi- 
zation and mobilization, personnel, and logistics. Most of these 
bodies appear to have been retained, although they have been 
trimmed and reorganized. The air force and navy are also sub- 
ordinate to the army general staff. 

Since 1990 the mission of the EPS has been to ensure the 
security of the national borders and to deal with internal dis- 
turbances. Its primary task has been to prevent disorder and 



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Nicaragua: A Country Study 




210 



National Security 



violence wrought by armed bands of former Contra and Sandi- 
nista soldiers (see Internal Security, this ch.). 

In November and December 1992, the EPS was deployed 
alongside the National Police to prevent violence during dem- 
onstrations by the National Workers' Front (Frente Nacional de 
Trabajadores — FNT) for improved pay and benefits. The EPS 
and the Frontier Guards also assist the police in narcotics con- 
trol. A small EPS contingent works alongside demobilized Con- 
tras in a Special Disarmament Brigade to reduce the arsenal of 
weapons in civilian hands. 

Army 

As of 1993, the army's strength was estimated at 13,500 per- 
sonnel. The EPS is organized into six regional commands and 
two military departments subordinate to the general staff (see 
fig. 14). The largest unit is a motorized infantry brigade of four 
battalions. In addition, there are a mechanized infantry battal- 
ion and three artillery battalions. The Irregular Warfare Battal- 
ions have been reduced to ten infantry companies. A Special 
Forces battalion has been formed from airborne and Special 
Forces personnel. Most of these units are neither fully staffed 
nor adequately equipped. 

The army continues to depend on Soviet weapons delivered 
during the 1980s. Most of these are out-of-date and poorly 
maintained. The EPS's inventory of armor — heavy and light 
tanks, APCs, and reconnaissance vehicles — remains large by 
Central American standards. However, most of the Soviet T-55 
tanks are reportedly in storage because of a lack of funds and 
personnel to maintain them. The PT-76 light tanks form the 
primary armor of the mechanized infantry battalion. Only 
about seventy-five APCs and reconnaissance vehicles are opera- 
tional, and some of the armored weapons have been sold to 
other Latin American countries. 

The army retains a considerable supply of 122mm and 
152mm towed artillery pieces and multiple rocket launchers. 
Twelve of its APCs are mounted with Soviet AT-3 (Sagger) anti- 
tank guided missiles. The army retains numerous antitank guns 
and a stock of Soviet shoulder-fired antiaircraft missile launch- 
ers (see Table 12, Appendix A). 

Air Force 

When the Sandinistas assumed control in 1979, the Sandi- 
nista Air Force/Air Defense Force (Fuerza Aerea Sandinista/ 



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Nicaragua: A Country Study 

Defensa Anti-Aerea — FAS/DAA) inherited only the remnants 
of the National Guard's small air force. Equipment included a 
few AT-33A armed jet trainers, Cessna 337s, and some trans- 
ports, trainers, and helicopters. The time required to train 
pilots and construct airfields precluded a rapid FAS/DAA 
buildup. Beginning in 1982, the Sandinistas received from 
Libya the Italian-made SF-260A trainer/tactical support air- 
craft and the Czech L-39 Aero Albatros, a subsonic jet trainer 
that could be missile-armed for close-in air defense. In addition 
to light and medium transport aircraft, the air force acquired a 
fleet of helicopters from the Soviet Union that served as a vital 
asset in the war against the Contras. They included Mi-8 and 
Mi-17 transport helicopters and later the Mi-24, followed by its 
export variant, the Mi-25, a modern armored assault helicop- 
ter. After Humberto Ortega revealed that Nicaragua had ap- 
proached France and the Soviet Union for Mirage or MiG 
fighter planes, the United States warned against introducing 
modern combat jets to the region. Although Nicaragua began 
construction of a new airbase with a longer runway and protec- 
tive revetments, it did not succeed in acquiring new fighter air- 
craft. 

A series of radar sites were constructed to give the Sandinis- 
tas radar coverage over most of Nicaragua, with the added 
capability of monitoring aircraft movements in neighboring 
countries. A Soviet-designed early-warning/ground-control 
intercept facility gave the air force the potential to control its 
combat aircraft from command elements on the ground. 

After 1990 the FAS/DAA was no longer able to maintain its 
full aircraft inventory without Soviet support. The personnel 
complement fell from 3,000 in 1990 to 1,200 in 1993. Airbases 
at Bluefields, Montelimar, Puerto Cabezas, Puerto Sandino, 
and Managua remained operational. Combat aircraft were 
reduced to a single mixed squadron of Cessna 337s, L-39s, and 
SF-260As. However, the serviceability of all these aircraft was 
doubtful. In 1992 a number of helicopters and six radar units 
were sold to Peru. A small fleet of helicopters, transports, and 
utility/ training aircraft was retained. 

Navy 

The "navy" of Somoza's National Guard consisted of a few 
old patrol boats. The Sandinistas acquired more modern ves- 
sels, although none was larger than fifty tons. The navy's mis- 
sion was to discourage seaborne Contra attacks and to deter 



212 



Sandinista People's Army truck in Villa Nueva 



CIA-run operations such as the destruction of diesel storage 
facilities at Corinto in 1983 and the mining of Nicaraguan har- 
bors in 1984. The Sandinista Navy (Marina de Guerra Sandi- 
nista — MGS), which had reached a peak strength of 3,000 
personnel in 1990, suffered a sweeping reduction to 500 by 
1993. 

The commander of the navy is an EPS officer with the rank 
of major. The principal bases of the MGS are at the ports of 
Corinto on the Pacific and Puerto Cabezas on the Caribbean. 
Other installations are at El Bluff near Bluefields and San Juan 
del Sur On the Pacific. 

The Sandinistas had eight Soviet minesweeping boats, of 
which seven remained in 1993, but none is known to be in 
operating condition. Three Soviet Zhuk-class patrol boats are 
believed to be seaworthy, out of seven that remained at the end 
of 1990. Also believed to be operational are three North 
Korean fast patrol boats and two Vedette-type boats built in 
France and armed with Soviet 14.2mm machine guns. 

Defense Spending 

According to studies published by the United States Arms 
Control and Disarmament Agency (ACDA), Nicaraguan mili- 



213 



Nicaragua: A Country Study 

tary spending totaled US$10 million in 1979, the year in which 
the Somoza administration was overthrown. This amount con- 
stituted 0.8 percent of the gross national product (GNP — see 
Glossary). Under the Sandinistas, military expenditures rose 
rapidly, going from US$53 million in 1980 to US$192 million 
in 1985. The latter figure was more than 17 percent of GNP 
and more than 26 percent of total government expenditures. 
ACDA was unable to estimate defense spending for the years 
1986-89. 

Valid comparisons of defense outlays between the Ortega 
and Chamorro administrations are difficult because of hyper- 
inflation, the precipitous drop in value of the cordoba (C$ — 
for value, see Glossary), and the chaotic exchange rate struc- 
ture in the late 1980s. The United States Department of State 
estimated that military expenditures in 1989 were between 
US$76 million and US$90 million, a reduction of 44 percent 
from the previous year. In 1989 defense outlays constituted 36 
percent of the entire budget. The announced defense budget 
figure for 1990 was US$166 million, corresponding to 25 per- 
cent of the total government budget that year. As military cut- 
backs continued, Chamorro's military budget proposal for 
1991 of US$78.6 million was reduced by the National Assembly. 
According to ACDA, actual defense spending in 1991 was 
US$70 million, equivalent to 4 percent of the GNP and 14 per- 
cent of the national budget. 

To some extent, the EPS has been able to compensate for 
these drastic curbs on spending by selling excess equipment. In 
1992, for example, the EPS sold Soviet helicopters, APCs, can- 
nons, and antiaircraft missiles to the Peruvian armed forces for 
US$25 million. All receipts from such sales went directly to the 
EPS. 

United States concern over Sandinista control of the police 
and security forces precluded extending military aid to the 
Chamorro government and prohibited transactions under the 
United States Foreign Military Sales Program. In fiscal year 
(FY — see Glossary) 1994, however, the United States Depart- 
ment of Defense proposed allocating a small amount of money 
to the EPS for civil-military training. The EPS has sought fur- 
ther military cooperation with the United States, which the 
United States has made conditional on establishment of civil- 
ian control over the EPS and prosecution of alleged human 
rights violations by members of the EPS. 



214 



National Security 



Internal Security 

An end to war-related violence in 1990 brought a brief 
period of conciliation between the competing political factions 
in Nicaragua. That year, the last 1,000 persons detained in con- 
nection with the Contra conflict were released. That action fol- 
lowed the release in 1988 and 1989 of some 2,800 members of 
the National Guard and others held by the Sandinista govern- 
ment on security-related grounds. 

Frequent episodes of political violence continue to plague 
the heavily polarized Nicaraguan society. Clashes resulting in 
bloodshed are often the outgrowth of demonstrations and pro- 
tests in areas of the country where Chamorro's strength is 
greatest or in border areas where support for the Contras has 
been strong. Disputes over resettlement and land title have 
brought violent confrontations in many rural areas. By invad- 
ing government-owned cooperatives, both ex-Contras and 
former EPS soldiers have attempted to regain land that had 
been expropriated from the Somozas. The assassination of 
former Contra leader Enrique Bermudez Varela in February 
1991, followed by an inept police investigation and the failure 
to identify any suspects, has undermined confidence in the 
ability of the government and the security forces to maintain 
order. 

The Contra war left Nicaragua bitterly divided and heavily 
armed. An estimated 25,000 to 100,000 weapons remain in 
civilian hands. By mid-1991, some demobilized Contras had 
begun to rearm in small groups. These Recontras, as they were 
called, carried out numerous raids, originally intended to pres- 
sure the government into honoring its promises of jobs, farms, 
and credit for land purchases and to bring about an end to 
harassment by police and security forces. The Recontras' 
actions included kidnappings of Sandinistas for ransom and 
attacks on members of farm cooperatives. In 1993 the United 
States Department of State described the activities of the 
Recontras as principally criminal, with political overtones (see 
Interest Groups, ch. 4). 

The best known of the Recontra groups is Northern Front 3- 
80 (Frente Norte 3-80), whose strength in 1993 was estimated 
at 1,400. The Recontra guerrillas survive because of support 
from sympathetic local peasants in mountainous areas north of 
Managua where police and army patrols rarely venture. They 
also receive some financial help from conservative Nicaraguan 
and anti-Castro Cuban groups in Miami. 



215 



Nicaragua: A Country Study 

A number of pro-Sandinista armed bands composed of dis- 
missed members of the EPS call themselves Recompas, from 
compas (derived from companeros), the term by which Sandinista 
soldiers referred to one another. The main Recompa group is 
the Revolutionary Front of Workers and Peasants (Frente Revo- 
lucionario de Obreros y Campesinos — FROC). In July 1993, 
the FROC gained control of the northern town of Esteli, 
reportedly looting some US$4 million from banks and shops 
before regular army troops drove them out, in the process 
incurring numerous civilian casualties. A month later, a large 
government delegation that had been invited to discuss an 
amnesty offer with the FROC was taken hostage by the right- 
wing Northern Front 3-80. In retaliation, pro-Sandinistas kid- 
napped thirty-four UNO government officials, including the 
country's vice president, who were meeting in Managua. Fol- 
lowing intense negotiations, both sides released their hostages. 

The grievances against the government by Recontras and 
Recompas are similar in many ways. Although the predecessor 
organizations of both groups fought each other in the 1980s, 
the Recontras and Recompas have, for the most part, avoided 
violent confrontations with each other in the 1990s. An 
amnesty proclaimed by the National Assembly in 1993 resulted 
in the surrender of large numbers of personnel from both 
rebel groups, leaving some 600 from each side still in the field. 

Police and Law Enforcement 

The collapse of the Somoza administration in 1979 left Nic- 
aragua without any agency in charge of public order because 
the National Guard had performed police services, albeit in a 
repressive and corrupt fashion. For a brief period, FSLN veter- 
ans, working with the Sandinista Defense Committees and 
other mass organizations, provided rudimentary police func- 
tions, but this improvised system failed to prevent an upsurge 
of organized criminal activity, armed robbery, and attacks by 
youth gangs. The easy availability of weapons also contributed 
to the breakdown of law enforcement. A more professional 
police force was gradually put into place with the help of secu- 
rity training by the Panamanian National Guard and the Cuban 
government. Panama also donated vehicles and equipment 
and accepted several hundred Nicaraguans in Panama's police 
training academy. 

Under the newly established Ministry of Interior, the Sandi- 
nista Police (Poliria Sandinista — PS) was headed by a former 



216 



National Security 



FSLN brigade commander. Individual operating sections were 
responsible for traffic, public safety, prisons, communications, 
surveillance, legal processing, and embassy protection. Women 
made up a substantial proportion of the force. 

An eight-month training course for police cadets included a 
heavy dose of military training because in a national emer- 
gency the PS was expected to perform a support role in 
national defense. In addition to controlling street crime, the 
police were called on to combat the social legacy of the corrupt 
Somoza administration by enforcing morality and public wel- 
fare laws. Campaigns were launched against prostitution and 
alcoholism, but the new morality ordinances were enforced 
only sporadically. The crime rate was reduced somewhat when 
the police were granted authority to arrest "known delin- 
quents" for "illegal association" when more specific charges 
could not be proven. 

The police were later assisted by Revolutionary Vigilance 
Patrols organized by neighborhood Sandinista Defense Com- 
mittees. These patrols conducted nighttime walks through 
neighborhoods and tended to discourage community crime. 
The PS also cooperated with the state security forces to sup- 
press counterrevolutionary elements and to arrest political 
opponents of the administration. 

Known as the National Police after 1990, the police force 
has continued to be controlled by Sandinistas despite the turn- 
over of power to President Chamorro. The National Police's 
total complement was given as 11,000 by one source. The San- 
dinista police commander, Rene Vivas Lugo, remained its 
head. Police matters come under the Ministry of Government, 
which replaced the Ministry of Interior. The police, who act 
with substantial autonomy, have been repeatedly accused of 
human rights violations. A local human rights group has 
described the use of torture as an investigative tool as "system- 
atic." 

Many state security officials linked to serious human rights 
violations under the Sandinistas assumed positions as chiefs of 
police in provincial towns. To investigate and correct police 
wrongdoing, in 1991 a Civil Inspection Unit (also seen as Civil 
Inspectorate) was formed within the Ministry of Government. 
The following year, Chamorro appointed a civilian who had no 
Sandinista ties as vice minister of government responsible for 
supervising the police. Twelve police commanders, including 
Vivas, were removed and more moderate Sandinistas appoint- 



217 



Nicaragua: A Country Study 

ed from within the ranks. A new police law has instituted a reg- 
ular system of promotion and retirement, emphasizing profes- 
sionalism and subordination to civilian authority. 

Although the counternarcotics efforts of the National 
Police are relatively weak, the drug problem in Nicaragua 
appeared to be quite modest as of 1993. Cocaine use appears to 
be the primary problem. The only local drug produced is mari- 
juana, which is consumed domestically. Nicaragua is on an 
overland drug transit route from South America to the United 
States via the Pan American Highway, and drug movement by 
ship has been suspected through both Caribbean and Pacific 
ports. The effectiveness of drug law enforcement has been lim- 
ited, although a law was passed in 1992 to authorize the estab- 
lishment of an antinarcotics unit in the National Police. 

Secret Police and Intelligence 

Under the Sandinistas, the secret police and intelligence 
operations of the Ministry of Interior were the main instru- 
ments used to maintain FSLN control and suppress dissent. 
The secret police agency, the General Directorate of State 
Security (Direccion General de Seguridad del Estado — DGSE), 
carried out surveillance and operations against perceived 
opponents. The DGSE could detain suspected counterrevolu- 
tionaries and hold them indefinitely without charge. It oper- 
ated its own detention and interrogation centers and 
clandestine prisons. The DGSE was reportedly assisted by at 
least 100 Cuban advisers. 

After Chamorro's election in 1990, the DGSE, along with 
1,200 of its 1,700 members, was transferred to the army and 
renamed the Directorate of Defense Information (Direccion 
de Information para la Defensa — DID). The DGSE's chief, 
Colonel Lenin Cerna Juarez, a militant Sandinista, became 
head of the DID. Human rights activists called on President 
Chamorro to remove Cerna from his position and to investi- 
gate human rights violations attributed to him while he headed 
the DGSE. In 1993 Chamorro established the Directorate of 
Intelligence Affairs in the Office of the Presidency to coordi- 
nate intelligence matters. This new directorate has not func- 
tioned effectively under its civilian head and the DID remains 
under EPS control. Cerna, however, was transferred from the 
DID to the post of inspector general of the EPS. 

Little is known about DID functions in the military, but the 
organization is believed to conduct both military intelligence 



218 



National Security 



and internal intelligence gathering. Local human rights 
groups claim that the DID has followed the DGSE practice of 
operating wiretaps, intercepting mail, and conducting illegal 
searches of homes and businesses. Unlike the DGSE, however, 
DID does not have the power of arrest and therefore is not in a 
position to impose its authority on the civilian population, as 
was the case with its predecessor agency. 

Human Rights 

During the Sandinistas' eleven years in power, the Sandi- 
nista security forces were accused of widespread repression and 
numerous violations of human rights, often in conjunction 
with the army. These violations included the murder of per- 
ceived Contra supporters, kidnappings, disappearances, illegal 
detentions, and mistreatment and torture of prisoners. Accord- 
ing to the human rights group Americas Watch, a high percent- 
age of DGSE prisoners were coerced into signing confessions 
by deception, physical force, or deprivation. The security forces 
were also responsible in 1982 for the summary relocation of 
the Miskito under cruel conditions. Gross human rights abuses 
were also committed by the Contras. These abuses included sys- 
tematic murder, torture, and kidnapping of civilian supporters 
of the FSLN. Undefended farm cooperatives and other facili- 
ties, such as clinics, associated with the Sandinistas were 
attacked. The raids led to many civilian casualties and execu- 
tions. 

According to local human rights groups, as many as 1,000 
persons remained unaccounted for at the close of the Contra 
war in 1990. Numerous clandestine grave sites — most ascribed 
to the Sandinistas but some to the Contras — were discovered, 
providing evidence of the whereabouts of some persons who 
had disappeared. At one site, Correntada Larga on the south 
Caribbean coast, witnesses reported the torture and killing of 
sixty-seven peasants by the DGSE during a two-week period in 
1981. 

The end of armed conflict in 1990 brought improvement in 
the human rights situation; however, sporadic incidents of 
political or extrajudicial killings continue to occur. Rural vio- 
lence is often associated with disputes in which demobilized 
Contras and peasants seek to negotiate a share of state-owned 
cooperatives. The disputes lead to clashes with police and often 
result in peasants occupying the cooperatives. The number of 
violent deaths of former Contras at the hands of the police, the 



219 



Nicaragua: A Country Study 

army, or FSLN militants rose in 1993. In some incidents during 
which civilians were killed, government security forces were 
provoked by unruly and sometimes violent protesters. Even 
when it seems that the police have used disproportionate force 
or committed wanton murder, police actions are rarely investi- 
gated or punished. 

Prison Conditions 

The capacity of the Nicaraguan prison system was greatly 
expanded during the Sandinista period to keep pace with the 
incarceration of political prisoners. By the mid-1980s, the 
country had nine penitentiaries or public jails, holding cells in 
forty-eight local police stations, and some twenty-three DGSE 
detention centers. By the government's own estimate, there 
were 5,000 prisoners in 1984, of whom 2,000 were members of 
the National Guard or others accused of cooperation with the 
Contras. An independent human rights group in Nicaragua, 
the Permanent Human Rights Commission, claimed in 1986 
that 10,000 were incarcerated, 70 percent of whom were politi- 
cal dissidents. The International Committee of the Red Cross, 
which periodically visited prisons, counted more than 1,000 
members of the National Guard and 1,500 others accused of 
pro-Contra activity in early 1988. An estimated 500 to 600 addi- 
tional persons were in DGSE facilities. After the release of 
thirty-nine inmates in February 1990, no further political pris- 
oners were believed to be in Nicaraguan jails. 

Under the Sandinistas, mistreatment and torture were 
reported to be common in the DGSE detention centers. The 
regular penitentiaries and public jails were known for primitive 
conditions and corruption emanating from the Prison Direc- 
torate under the Ministry of Interior. The largest penitentiary 
at Tipitapa outside Managua held most of the members of the 
National Guard and persons linked to the Contras. Tensions 
between inmates and guards were high, especially during 
peace talks, when releases appeared to be near. Tensions were 
aggravated by political prisoners who were unwilling to do 
work that they believed could help the Sandinista cause. 

In late 1990, President Chamorro created a National Peni- 
tentiary Commission to oversee and improve the penal system. 
A report issued by a human rights group in 1992 described 
conditions in the national penitentiary system as "disastrous." 
The report accused the government of inexcusable indiffer- 
ence because it failed to allocate adequate funds. The prison- 



220 



National Security 



ers were described as suffering from lack of food, clothing, 
medicine, and medical treatment. Cases of malnutrition were 
found, as well as contaminated water. Although physical abuse 
in the penitentiaries was rare, a high percentage of prisoners 
complained of torture and mistreatment in police detention 
cells. As a result of drastic cutbacks in the judicial system's bud- 
get, more than half of the prisoners in 1993 were persons await- 
ing trial. 

Criminal Justice System 

Immediately after the Sandinista victory in 1979, the FSLN 
government enacted by decree a Statute on the Rights and 
Guarantees of Nicaraguans. Among many provisions, the 
decree banned the death penalty and all forms of torture as 
well as cruel and degrading punishment. The maximum sen- 
tence for any crime was set at thirty years. Basic procedures 
were outlined for arrest and detention, including a defendant's 
right to legal counsel. Arbitrary violation of an individual's per- 
sonal integrity, home, or correspondence was prohibited. 
These principles were gradually eroded by a series of measures, 
the first of which, the Law of National Emergency in 1982, 
legalized prolonged detention of opponents of the govern- 
ment and imposed constraints on political opposition and 
labor groups. An expanded State of Emergency, announced in 
1985, virtually suspended all civil liberties, including the prohi- 
bition against arbitrary imprisonment, the presumption of 
innocence, the right to a fair and speedy trial, and habeas cor- 
pus. 

An immediate problem faced by the new Sandinista admin- 
istration in 1979 was how to handle the approximately 7,800 
former members of the National Guard and former Somoza 
government officials who had been interned and then incar- 
cerated. There was strong popular sentiment for executing 
those who were identified as torturers or "war criminals." Both 
Sandinista troops and the general public killed some captured 
Somoza supporters. The Sandinista junta later admitted that 
perhaps 100 Somoza officials had been put to death in the cha- 
otic period following the July 1979 victory, but most were held 
for appearances before special tribunals that sat between 
November 1979 and February 1981. Trials by these politicized 
tribunals were heavily publicized to remind the public of the 
evils of the Somoza administration. Some 6,300 trials were con- 



221 



Nicaragua: A Country Study 

ducted; there was a 78 percent conviction rate, and sentences 
ranged up to thirty years. 

The proceedings of the tribunals were widely criticized by 
international human rights groups. Sandinistas who were not 
lawyers sat as judges and presented evidence. The charges were 
often vague and imprecise, and defendants had little time to 
prepare a defense. A proper appeals mechanism was lacking, 
and some of the accused were exposed to a campaign against 
them by the FSLN media. Nevertheless, the accused had legal 
representation, media access was permitted, and convictions 
were based on the previously existing legal code. Observers 
sympathetic to the Sandinistas argued that the justice adminis- 
tered by the special tribunals was relatively fair, especially when 
compared with actions taken by other newly victorious revolu- 
tionary governments in a similarly heated atmosphere. 

A major problem of the early years of the Sandinista admin- 
istration was the overcrowded criminal docket, which led to 
lengthy periods of detention for those awaiting trial and sen- 
tencing. In 1983 jury trials were limited to only the most severe 
felonies on the grounds that this limitation would help unclog 
the courts. A law of amparo, a feature of Spanish common law 
empowering courts to obtain redress of administrative excess 
or error, was suspended by the 1982 Law of National Emer- 
gency. The emergency law also suspended the limitation of 
seven days' detention without arraignment. 

Two additional legal innovations were introduced by the 
FSLN junta. One was the People's Anti-Somoza Tribunals (Tri- 
bunales Populares Anti-Somocistas — TPAs). Similar to the spe- 
cial tribunals, members of the TPA panels were drawn from 
Sandinista mass organizations, and their jurisdiction was over 
persons charged as members of the Nicaraguan Resistance. 
The TPAs' jurisdiction later was expanded to include a broad 
category of acts construed to threaten the revolution. Defen- 
dants were held incommunicado for indefinite periods, and 
their legal counsels were unable to present a proper defense. 
In some cases, defendants were compelled to appear without 
benefit of attorney. Nearly all the accused were convicted, usu- 
ally after long detention before trial. The TPAs were abolished 
in 1988, but many of the TPA judges were transferred to regu- 
lar criminal courts. 

The second legal innovation was an expansion of police 
power. In 1980 the Sandinista Police were given authority to 
adjudicate cases of cattle rustling, drug dealing, and insult to 



222 



National Security 



authority. Later, police power was further expanded to include 
the breaking up of unauthorized demonstrations and dealing 
with economic crimes such as hoarding, with sentences of up 
to two years. This new authority also extended the traditional 
powers of police judges to impose sentences of up to six 
months on such charges as vagrancy, drunkenness, or disturb- 
ing the peace. The police courts could impose sentences with- 
out granting defendants the right to counsel, the right to call 
witnesses, or the right to appeal to courts in the regular judicial 
system. 

After the Chamorro government took office in 1990, it 
began efforts to depoliticize the judiciary. However, it was not 
until late 1993 that the Supreme Court, whose members serve 
six-year terms, had a non-Sandinista majority. Some progress 
was made in replacing Sandinista appointees to the 250 trial 
and appellate judgeships, yet Sandinista appointees remained 
in the majority in 1993. Nevertheless, because the Supreme 
Court appoints appeals and lower court judges, the prospect 
for more non-Sandinista judges seems favorable. 

Military courts continue to be responsible for dealing with 
crimes committed by or against members of the armed forces 
or police. Proceedings of trials in military courts are secret, 
although information can be released at the discretion of the 
military. According to the United States Department of State's 
annual human rights reports, convictions by military courts are 
rare, and even when soldiers are convicted, they receive light 
sentences or the sentences are not enforced. According to a 
1991 study by Americas Watch, almost no political crimes — 
whether committed by members of the military, ex-Contras, or 
civilians partial to the Sandinistas or to UNO — were prosecuted 
in the judicial system. 

Procedures for the arrest of criminal suspects are set forth 
in the Police Functions Law. The law requires police to obtain a 
warrant before detaining a suspect, but the warrant is issued by 
a police official rather than a magistrate. The law also permits 
police to detain suspects for up to nine days for the purpose of 
collecting evidence before they are brought before a judge. 
Police are required to inform families when persons are 
detained but rarely do so, and detainees are not granted access 
to legal counsel once charged, as required by the constitution. 
The Reform Law of Penal Procedures, passed in 1991, provides 
for a maximum of three days' detention, but police continue to 
follow the Police Functions Law, which has not been amended. 



223 



Nicaragua: A Country Study 

The 1991 reform law also provides for bail; previously only 
compelling reasons such as ill health qualified accused crimi- 
nals to remain at liberty while awaiting trial. 

Defendants have the right to legal counsel at their trials. 
Although indigents are entitled to pro bono counsel, public 
defenders do not exist. In spite of the constitutional right to a 
speedy trial, arrested persons often spend months in jail before 
appearing in court. Under the 1991 law reforming penal pro- 
cedures, jury trials have been restored. However, the jury sys- 
tem has not proven effective, partly because prospective jurors 
seek to evade jury duty, delaying trials. Those convicted have 
the right of appeal. 

In 1993 Nicaragua had made strides in respecting human 
rights and its legal system. The mission of the Nicaraguan mili- 
tary, however, was still in a state of flux. Only established as a 
modern national entity in the 1930s, the Nicaraguan army was 
first a tool of the Somozas (as the National Guard) and then 
the military arm of the FSLN during the Sandinistas' eleven 
years in government. Despite massive downsizing and attempts 
to increase professionalism in the 1990s, in 1993 the Nicara- 
guan army was still controlled by its former FSLN leaders and 
unsure of its role. Whether the country's armed forces could 
become a truly national army was a question still unanswered. 

* * * 

The history of the Nicaraguan armed forces from the coun- 
try's beginnings until the first years of the Sandinista era is 
traced in Armed Forces of Latin America by Adrian J. English. Rev- 
olution and Foreign Policy in Nicaragua by Mary B. Vanderlaan 
reviews the Sandinista military buildup and defense policy dur- 
ing the Sandinistas' first six years. Supplementary information 
on the Sandinista People's Army can be found in an article by 
Stephen M. Gorman and Thomas W. Walker in Nicaragua: The 
First Five Years. The brief article, "Nicaragua in Crisis," by Julio 
Montes in Jane 's Intelligence Review summarizes the effects of the 
tremendous cutback in the armed forces since 1990. 

Much of the data on the Nicaraguan weapons inventory 
cited in this chapter is based on The Military Balance, 1993—94 
and information from Jane's Fighting Ships, 1993-94. 

Nicaraguan internal security, law enforcement, and court 
and prison conditions are surveyed in reports from Americas 
Watch and in the United States Department of State's annual 



224 



National Security 

Country Reports on Human Rights Practices. (For further informa- 
tion and complete citations, see Bibliography.) 



225 



Appendix A 



Table 

1 Metric Conversion Coefficients and Factors 

2 Total Population and Population Density by Department, 

1990 

3 Socioeconomic Classes and Their Percentage of the Labor 

Force, 1980 

4 Enrollment by Level of Education, Selected Years, 1970-87 

5 Selected Economic Indicators, 1980-92 

6 Major Trading Partners, 1984, 1989, and 1991 

7 Production of Selected Commodities, 1985-89 

8 Principal Exports, 1984-88 

9 National Assembly Seats, Elections of 1985 and 1990 

10 UNO Political Parties, 1992 

11 Non-UNO Political Parties, 1992 

12 Major Items of Military Equipment, 1993 



227 



Appendix A 



Table 1. Metric Conversion Coefficients and Factors 

When you know Multiply by To find 

Millimeters 0.04 inches 

Centimeters 0.39 inches 

Meters 3.3 feet 

Kilometers 0.62 miles 

Hectares (10,000 m 2 ) 2.47 acres 

Square kilometers 0.39 square miles 

Cubic meters 35.3 cubic feet 

Liters 0.26 gallons 

Kilograms 2.2 pounds 

Metric tons 0.98 long tons 

1.1 short tons 

2,204.0 pounds 

Degrees Celsius 1.8 degrees 

(Centigrade) and add 32 Fahrenheit 



229 



Nicaragua: A Country Study 



Table 2. Total Population and Population Density by Department, 

1990 



Department 


Population 


Inhabitants per 
Square 




1 1 1 Clf\t\ 


no 
AO 




i cca r\f\r\ 


1 2*7 






oy 




1 9Q Afifi 


91 




l an i An 


7ft 


Granada 


162,600 


164 


Jinotega 


1 7n finn 


1 ft 




3,44 H00 


66 


Madriz 


88,700 


55 




1,026,100 


305 


Masaya 


230,800 


335 


Matagalpa 


322,300 


47 


Nueva Segovia 


122,100 


34 


Rio San Juan 


52,200 


7 


Rivas 


149,800 


68 


Zelaya 1 


298,900 


5 


NICARAGUA 


3,870,700 


32 



As of 1993, divided into Region Autonomista Atlantico Norte and Region Autonomista Altantico Sur. 



Source: Based on information from Germany, Statistisches Bundesamt, Landerbericht: 
Nicaragua, 1991, Wiesbaden, 1991, 24. 



230 



Appendix A 



Table 3. Socioeconomic Classes and Their Percentage of the Labor 
Force, 1980 1 



Class 


Number 


Percentage of 
Labor Force 


Upper class (large landowners or owners of large industrial, 
commercial, and service enterprises employing more than 
100 persons) 


22.000 


2.0 


Middle class (medium landowners and owners of medium 
urban enterprises, independent professionals, and sala- 
ried administrators and technicians) 


176,500 


19.4 


Upper peasants (middle-income smallholders and their 
unpaid family workers) 


25,900 


13.9 


Lower peasants (poor smallholders) 


149,300 


16.4 


Rural workers (landless agricultural workers: permanent, 
seasonal, and unemployed) 


100,500 


11.1 


Working class (salaried workers in construction, mining, 
industry, commerce, services, and government) 


153,500 


16.9 


Self-employed workers (nonsalaried artisans, peddlers, and 
unskilled workers) 


79,700 


8.8 


Domestics and urban unemployed 


120,400 


13.3 


TOTAL 


908,000 


100.0 



Landholding categories are defined by size and land use. Medium landowners hold 50-500 manzanas (one 
manzana is equal to 0.7 hectares) in domestic consumption crops; 14r-65 manzanas incoffee; 50-200 man- 
zanas in cotton; or 200-1,000 manzanas in cattle. Upper peasants possess 10-50 manzanas in domestic con- 
sumption crops; 5-15 manzanas in coffee; 5-50 manzanas in cotton; or 20-200 manzanas in cattle. Large 
landowners and lower peasants, respectively, have holdings above and below these limits. 



Source: Based on information from Richard L. Harris, "The Economic Transformation 
and Industrial Development of Nicaragua," in Richard L. Harris and Carlos M. 
Vilas (eds.), Nicaragua: A Revolution under Siege, London, 1985, 47-48. 



Table 4. Enrollment by Level of Education, Selected Years, 1970-87 



Level of Education 


1970 


1980 


1985 


1987 


Primary school 


285,300 


472,200 


561,600 


583,700 


Middle school and high school 


42,200 


120,500 


100,000 


132,700 


Vocational school 


4,441 


16,661 


41,749 


33,241 


Teachers' college 


1,757 


2,560 


9,570 


11,228 


University 


9,385 


35,268 


29,000 


26,878 



Source: Based on information from Germany, Statistisches Bundesamt, Landerbericht: 
Nicaragua, 1991, Wiesbaden, 1991, 35. 



231 



Nicaragua: A Country Study 



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232 



Appendix A 



Table 6. Major Trading Partners, 1984, 1989, and 1991 
(in percentages) 



Country 1984 1989 1991 
Exports 

Germany 1 14.2 21.1 14.0 

Japan 11.5 6.7 11.0 

Soviet Union 2.2 2.9 n.a. 2 

Canada 0.4 21.1 11.0 

United States n.a. 0.0 16.4 

Imports 

Mexico 41.1 12.2 n.a. 

Costa Rica 12.2 9.0 7.8 

Soviet Union 10.3 19.4 10.1 

Cuba 8.1 15.3 8.0 

United States n.a. 0.0 21.3 

Venezuela n.a. n.a. 7.1 



1 Prior to 1990, for West Germany only. In 1991 for Germany. 

2 n.a. — not available. 

Source: Based on information from Economist Intelligence Unit, Country Profile: Nica- 
ragua, Costa Pica, Panama, 1991-92, London, 1991, 26; and Economist Intelli- 
gence Unit, Country Report: Nicaragua, Costa Rica, Panama, London, No. 4, 
1992,8. 



Table 7. Production of Selected Commodities, 1985-89 
(in thousands of tons) 



Commodity 1985 1986 1987 1988 1989 

Bananas 127 101 119 144 132~ 

Beef 42 45 40 33 29 

Coffee 50 43 37 43 42 

Corn 234 234 277 280 299 

Cotton 69 49 49 33 22 

Rice 156 144 149 111 104 

Shrimp and lobster ... 3 3 2 3 3 

Sugarcane 2,831 2,810 2,575 1,932 2,300 



Source: Based on information from Economist Intelligence Unit,Country Profile: Nicaragua, 
Costa Rica, Panama, 1991-92, London, 1991, 18. 



233 



Nicaragua: A Country Study 



Table8.PrincipalExports, 1984-88 
(in millions of United States dollars) 



Commodity 1984 1985 1986 1987 1988 

Bananas 12 " 16 16 15 IF" 

Coffee 122 118 110 133 85 

Cotton 134 94 44 46 53 

Beef 18 11 5 15 19 

Shrimp and lobster .. . 13 13 9 14 4 

Sugarcane 21 7 17 14 5 



Source: Based on information from Economist Intelligence Unit, Country Profile: Nicaragua, 
Costa Rica, Panama, 1991-92, London, 1991, 25. 



Table 9. National Assembly Seats, Elections of 1985 and 1990 



Party 


1985 


1990 


FSLN 1 


61 


39 


MAP-ML 2 


2 


_3 


MUR 4 





1 


PCdeN 5 


2 


_3 


PCD 6 


14 


_3 


PLI 7 .. 


9 


_3 


PPSC 8 


6 


_3 


PSC 9 





1 


PSN 10 


2 


_3 


UNO 11 


n.a. 12 


51 



TOTAL , 96 92 



1 Frente Sandinista de Liberation National (Sandinista National Liberation Front) . 

2 Movimicnto de Action Popular-Marxista-Leninista (Popular Action Movement-Marxist-Leninist). 

3 Part of the UNO coalition in 1990. 

4 Movimiento de Unidad Revolucionaria (Revolutionary Unity Movement). 

5 Partido Comunista de Nicaragua (Communist Party of Nicaragua) . 

6 Partido Conservador Democrata (Democratic Conservative Party). 

7 Partido Liberal Independiente (Independent Liberal Party). 

8 Partido Popular Social Cristiano (Popular Social Christian Party) . 

9 Partido Social Cristiano (Social Christian Party). 

10 Partido Socialista Nicaraguense (Nicaraguan Socialist Party). 

11 Union National Opositora (National Opposition Union). Coalition formed to compete in the 1990 

election. 

12 n.a. — not applicable. 

Source: Based on information from The Europa Year Book, 1988, 2, London, 1988; and South 
America, Central America, and the Caribbean, 1993, London, 1993, 475. 



234 



Appendix A 



Table 10. UNO Political Parties, 1992 1 



Party Orientation Leader 

APC 2 right Miriam Arguello Morales 

MDN 3 center Roberto Urroz Castillo 

PAN 4 -do- Eduardo Rivas Gasteazoro 

PANC 5 right Hernaldo Zuniga Montenegro 

PCdeN 6 left Eli Altimirano 

PCN 7 right Silviano Matamoros Lacayo 

PDCN 8 center Agustm Jarquin Anaya 

PICA 9 -do- Alejandro Perez Arevalo 

PL 10 -do- Andres Zuniga Mercado 

PLC 11 right Jose Somarriba 

PLI 12 center Virgilio Godoy Reyes 

PPSC 13 -do- Luis Guzman 

PSD 14 -do- Guillermo Potoy 

PSN 15 left Gustavo Tablada Zelaya 



UNO-Union Nacional Opositora (National Opposition Union) . The APC, PANC, and PCN announced in 1992 
that they would merge as the National Conservative Party (Partido Conservador Nationalista-PCN) for the 
1996 elections. 

2 Alianza Popular Conservadora (Popular Conservative Alliance) . 

3 Movimiento Democratico Nicaragiiense (Nicaraguan Democratic Movement). 

4 Partido de Accion Nacional (National Action Party) . 

5 Partido de Accion Nacional Conservadora (Conservative National Action Party). 

6 Partido Comunista de Nicaragua (Communist Party of Nicaragua). 

7 Partido Conservador Nacional (National Conservative Party) . 

8 Partido Democrata de Confianza Nacional (Democratic Party of National Confidence) . 

9 Partido Integracionalista Centroamericano (Central American Integrationist Party) . 

10 Partido Liberal (Liberal Party) . 

11 Partido Liberal Constitucionalista (Liberal Constitutionalist Party) . 

12 Partido Liberal Independiente (Independent Liberal Party). 

13 Partido Popular Social Cristiano (Social Christian Popular Party). 

14 Partido Social Democrata (Social Democratic Party) . 

15 Partido Socialista Nicaragiiense (Nicaraguan Socialist Party). 



235 



Nicaragua: A Country Study 

Table 11. Non-UNO Political Parties, 1992 1 



Party Orientation Leader 

FSLN 2 left Daniel Jose Ortega Saavedra 

MUR 3 -do- Moises Hassan Morales 

PCD 4 right Jose Brenes 

PCSN 5 center Erick Ramirez Benevente 

PLIUN 6 -do- Rodolfo Robelo 

PMLN 7 left Isidro TeUez Toruno 

PPSCA 8 center Mauricio Diaz Davila 

PRT 9 left Bonifacio Miranda 

PS 10 right Fernando Aguero 

PUCA 11 -do- BlancaRojas 

PUNC 12 -do- William Estrada 



UNO — Union National Opositora (National Opposition Union) . The PCD announced that it would 
merge with three UNO parties as the Nicaraguan Conservative Party (Partido Conservador Nicar- 
aguense) for the 1996 elections. 

2 Frente Sandinista de Liberation National (Sandinista National Liberation Front) . 

3 Movimiento de Unidad Revolutionaria (Revolutionary Unity Movement). 

4 Partido Conservador Democrata (Democratic Conservative Party). 

5 Partido Social Cristiano Nicaraguense (Nicaraguan Social Christian Party) . 

6 Partido de Liberal Independiente de Unidad National (Independent Liberal Party of National Unity) . 

7 Partido Marxista-Leninista de Nicaragua (Nicaraguan Marxist-Leninist Party) . 

8 Partido Popular Social Cristiano Autentico (Authenthic Popular Social Christian Party) . 

9 Partido Revolutionario de los Trabajadores (Workers' Revolutionary Party). 

10 Partido Socialconservadismo (Social Conservative Party). 

11 Partido Unionista Centroamericano (Central American Unionist Party). 

12 Partido de Unidad National Conservadora (National Conservative Unity Party). 



236 



Appendix A 



Table 12. Major Items of Military Equipment, 1993 

Type and Description Country of Origin In Inventory 

Sandinista People's Army 
Tanks 

T-55 (heavy) Soviet Union 130 1 

PT-76 (light) -do- 22 

Armored reconnaissance 
BRDM-2 -do- 80 1 

Armored personnel carriers 

BTR-60 -do- 19 

BTR-152 (wheeled) -do- 100 1 

Towed artillery 

D-30 (122mm) -do- 36 

D-20 (152mm) -do- 60 

Mortars 

82mm ' -do- 500 

M-43 ( 120mm) -do- 20 

M-160 (160mm) -do- n.a. 2 

Multiple rocket launchers 

Type 63 (107mm) China 30 

BM-21 (122mm) Soviet Union 30 

Antitank weapons 

AT-3 Sagger missile . . .- -do- 12 

ZIS-2 57mm gun -do- 325 

ZIS-3 76mm gun -do- 84 

M-1944 100mm gun -do- 24 

Surface-to-air missiles 

S-7/-14/-1 6 shoulder-fired -do- 500 

Sandinista Air Force/Air Defense Force 
Combat and counterinsurgency 

Cessna 337 United States 6 3 

SF-260A Italy 4 

Transport 

An-2 (light) Soviet Union 8 

An-26 (medium) -do- 5 



237 



Nicaragua: A Country Study 



Table 12. Major Items of Military Equipment, 1993 



Type and Description 


Country of Origin 


In Inventory 


Helicopters 






Mi-24/25 (attack) 


-do- 


2 


Mi-8/-l7 


-do- 


19 


Air defense guns 






14.5mm 23mm 37mm 57mm 100mm 


Various 


800 


Sandinista Navy 






Patrol craft 






Sin Hung 


North Korea 


3 


Zhuk 


Soviet Union 


3 


Vedette 


France 


2 


Minehunters and minesweepers 






K-8 


Poland 


4 3 


Yevgenya 


Soviet Union 


7 3 



Some stored. 

n.a. — not available. 

May be nonoperational. 



Source: Based on information from The Military Balance, 1993-1994, London, 1993, 190; 
and Jane's Fighting Ships, 1993-94, Alexandria, 1993, 442. 



238 



Appendix B 



Central American Common Market 

THE CENTRAL AMERICAN COMMON MARKET (CACM), 
established by Guatemala, Honduras, El Salvador, and Nicara- 
gua (and later joined by Costa Rica) with the signing of the 
General Treaty of Central American Economic Integration 
(Tratado General de Integracion Economica Centroameri- 
cana) in Managua on December 15, 1960, was one of four 
regional economic integration organizations created during 
the Latin American export boom of the 1960s. The CACM and 
the three other Latin American trading blocs, the Latin Ameri- 
can Free Trade Area, the Caribbean Free Trade Association 
(Carifta), and the Andean Group, were generally alike in their 
initial endorsement of regional integration behind temporary 
protectionist barriers as a way to continue import-substitution 
industrialization (ISI — see Glossary). 

The basic strategy for development in Latin America was pio- 
neered in the 1950s by Raul Prebisch and the Economic Com- 
mission for Latin America and the Caribbean (ECLAC). The 
"ECLAC approach" applied a structuralist model of develop- 
ment that emphasized increasing private and public invest- 
ment in manufacturing and infrastructure in order to 
overcome dependence on exports of primary commodities. 
Prebisch argued that continued overreliance on primary com- 
modity exports as a source of foreign exchange would eventu- 
ally lead to economic stagnation and economic contraction, as 
population growth and falling commodity prices would exert 
downward pressure on per capita gross domestic product 
(GDP — see Glossary). Concurrently, Prebisch and ECLAC rec- 
ognized the inherent limitations of ISI based solely on manu- 
facturing for single-country domestic markets. Particularly for 
the smaller countries of the Western Hemisphere, strictly 
domestic production of manufactured goods would quickly sat- 
urate local demand and would prematurely reduce returns on 
capital investment. 

In order to overcome the limitations of single-country ISI, 
ECLAC proposed to expand the "local" market by means of 
common markets among like groups of countries. A common 
external tariff (CET) would allow nascent industries to develop 



239 



Nicaragua: A Country Study 

by protecting local manufacturers from extraregional competi- 
tion. 

The ECLAC approach was advanced and widely accepted 
throughout the Western Hemisphere as an alternative to both 
the liberal export-led growth model and the previous single- 
country ISI approach. In practice, however, elements of all 
three models coexisted uneasily in most Latin American econo- 
mies until the mid-1980s. 

Despite their common adherence to the ECLAC model of 
intraregional free trade within a protectionist framework, the 
various Latin American trading blocs differed from each other 
in the size and economic structure of their member states, 
their intermediate goals, their institutions, their cohesiveness, 
and their relationships to the global economy. In the case of 
the CACM, economic disequilibria among member states, 
incomplete and unbalanced implementation of the ECLAC- 
inspired integration scheme, and the inherent limitations of a 
development model based on protection from global competi- 
tion eventually undermined the CACM as originally conceived 
by ECLAC. The CACM's effectiveness waned following Hondu- 
ras's withdrawal in the wake of the 1969 Soccer War with El Sal- 
vador. The CACM stagnated throughout the 1970s and virtually 
collapsed during the prolonged Central American (see Glos- 
sary) political and debt crises of the 1980s, revitalizing only 
after its overhaul and the partial inclusion of Panama in the 
early 1990s. 

Institutions 

The post-World War II movement toward Central American 
economic integration began with a wave of bilateral free trade 
treaties signed among Guatemala, Honduras, El Salvador, Nica- 
ragua, and Costa Rica between 1950 and 1956. By the end of 
this period of bilateral negotiations, each country had become 
party to at least one of the treaties, which involved free trade in 
a limited range of products. The trend toward economic inte- 
gration was further bolstered by the formation of the Organiza- 
tion of Central American States (Organizacion de Estados 
Centroamericanos — Odeca) in 1951. Although primarily a 
political entity, Odeca represented a significant step toward the 
creation of other regional multilateral organizations. 

Economic cooperation at the multilateral level began to take 
shape under the auspices of ECLAC, which in August 1952 
began sponsoring regular meetings of the Committee of Eco- 



240 



Appendix B 



nomic Cooperation, comprising the ministers of economic 
affairs of the five Central American republics. It was through 
the committee that ECLAC advanced the Prebisch model of 
coordinated industrialization within regional trading blocs. 
ECLAC's active consultancy efforts facilitated the signing in 
1958-59 of three important integration agreements: the Multi- 
lateral Treaty on Free Trade and Central American Economic 
Integration (Tratado Multilateral de Libre Comercio e Inte- 
gracion Economica Centroamericana), the Integration Indus- 
tries Convention (Regimen de Industrias de Integration — 
RII), and the Central American Tariff Equalization Convention 
(Convenio Centroamericano sobre Equiparacion de Grava- 
menes a la Importation). 

The Multilateral Treaty on Free Trade and Central American 
Economic Integration provided for intraregional free trade in 
239 groups of Central American products and a ten-year phase- 
in of intraregional free trade in all Central American goods. 
The Central American Tariff Equalization Convention was a 
complementary agreement to the multilateral treaty, establish- 
ing a CET on 270 products, including all those listed under the 
treaty, and proposing a harmonization of tariffs on an addi- 
tional 200 products within five years. The tariff equalization 
convention would thereby provide the common barrier to 
extraregional imports under which Central American produc- 
ers would conduct a liberalized trade. 

The RII was the most controversial component of the 
ECLAC program and would be the most difficult to imple- 
ment. As originally conceived, the RII was to direct the flow of 
capital investment into the region by granting incentives and 
privileges to firms given "integration industries" status. In 
order to prevent costly duplication of capital investment, firms 
whose products had small consumer markets in the region 
would be given a virtual monopoly within the CACM. The Cen- 
tral American countries were supposed to distribute integra- 
tion industry plants among themselves in an equitable and 
efficient manner. 

The integration regime envisioned by the ECLAC-spon- 
sored agreements never entered fully into force, but was 
instead superseded by the General Treaty of Central American 
Economic Integration, which became the basis for the CACM. 
The general treaty represented a compromise between the 
ECLAC-inspired approach and the policy preferences of the 
United States. The latter proposed several significant changes 



241 



Nicaragua: A Country Study 

to the ECLAC integration scheme, the main difference being 
the establishment from the outset of intraregional free trade as 
the norm, rather than as the exception as provided for in the 
multilateral treaty. Under the United States plan, all products 
would be subject to intraregional free trade unless exempted. 
The United States was also opposed to the granting of monop- 
oly status to integration industries within the region. In 
exchange for adoption of its plan, the United States would pro- 
vide funding for the various institutions of the CACM and 
increase its economic aid to Central America. 

In February 1960, Guatemala, El Salvador, and Honduras 
accepted the United States-sponsored integration scheme and 
signed the Tripartite Treaty (Tratado Tripartito) in Esquipulas, 
Guatemala, establishing intraregional free trade as the norm 
and excluding an RII mechanism. The Tripartite Treaty evoked 
strong objections from ECLAC, which saw its guiding role in 
Central American integration undermined by United States 
involvement in the process. In response to protests from 
ECLAC and the government of Nicaragua, the United States 
and the parties to the Tripartite Treaty agreed to negotiate a 
compromise integration treaty to supersede all prior free-trade 
agreements. The General Treaty of Central American Eco- 
nomic Integration was signed in Managua, Nicaragua, by four 
of the five republics (Costa Rica delayed signing by two years) 
on December 13, 1960, with ECLAC conceding on the free 
trade issue and the United States conceding on the inclusion of 
the RII. The general treaty went into effect for Guatemala, El 
Salvador, and Nicaragua in June 1961 and for Honduras and 
Costa Rica in April and July 1962, respectively. 

In addition to the RII, the general treaty established a per- 
manent secretariat, Secretana Permanente del Tratado Gene- 
ral de Integracion Economica Centroamericana (SIECA), and 
a development bank, Banco Centroamericano de Integracion 
Economica (BCIE). A Central American Clearing House 
(Camara Centroamericana de Compensacion de Monedas) 
was established in 1963 to promote the use of local currencies 
in the settlement of short-term trade deficits between pairs of 
CACM member states. A Central American Monetary Council 
(Consejo Monetario Centroamericano) was set up the follow- 
ing year to promote monetary union. 

The CACM Experiment 

During the 1960s and 1970s, the CACM had a significant 



242 



Appendix B 



positive impact on trade flows in Central America. Intra- 
regional exports as a percentage of total exports grew dramati- 
cally — from 7 percent of total exports in 1960 to 26 percent in 
1970 — before declining to 23.4 percent in 1975 and to 14.7 
percent in 1985. The total value of trade within the region grew 
from US$33 million in 1960 to US$1.1 billion in 1980, drop- 
ping to US$421 million in 1986. By 1967, 95 percent of all 
goods traded within the region had attained duty-free status, 
and 90 percent of traded goods were covered by the CET. The 
goods exempted from intraregional free trade were mainly tra- 
ditional agricultural exports destined for global markets. 

Most of the new intraregional trade was in consumer goods, 
a large share of which consisted of processed foods. By 1970 
food processing was the single most prominent industrial activ- 
ity within the CACM, accounting for approximately 50 percent 
of gross industrial output. The preference for consumer goods 
production was built into the CACM tariff structure, which 
imposed a high CET on extraregional consumer goods but did 
not impede the import of intermediate or capital goods. 

In addition to the protection afforded to consumer goods 
production by the CET on consumer imports, CACM member 
states also promoted investment in industry by introducing 
generous tax incentives and exemptions for new and existing 
industrial firms. To help promote balanced development, the 
Central American Convention of Fiscal Incentives for Indus- 
trial Development (Convenio Centroamericano de Incentivos 
Fiscales al Desarollo Industrial) was signed among the then 
four CACM member states in 1962 to equalize the granting of 
tax incentives to industrial firms. The convention allowed Hon- 
duras and Nicaragua to offer temporarily broader tax breaks to 
industrial firms than the other two more industrialized repub- 
lics. Honduras became the main beneficiary of this differenti- 
ated treatment, gaining in 1969 an extension of its preferential 
taxation status. 

Another important incentive to industrial development 
within the CACM was the implementation of regional infra- 
structure development projects. Several development organiza- 
tions were established during the 1960s to improve 
intraregional transport and communications: the Regional 
Telecommunications Commission (Comision Tecnica de las 
Telecomunicaciones de Centroamerica — Comtelca), the Cen- 
tral American Corporation of Air Navigation Services (Corpo- 
racion Centroamericana de Servicios de Navegacion Aerea — 



243 



Nicaragua: A Country Study 

Cocesna), the Central American Maritime Commission 
(Comision Centroamericana de Transporte Mantimo — Coc- 
atram), and the Central American Railways Commission 
(Comision Centroamericana de Ferrocarriles — Cocafer). 
These organizations were financed mainly by the Regional 
Office for Central America and Panama (ROCAP) of the 
United States Agency for International Development (AID) as 
part of the Alliance for Progress initiative. AID/ROCAP also 
financed a Regional Highway Program to improve highway 
routes considered vital to intraregional trade. 

Stagnation of the CACM 

Despite the considerable expansion of intraregional trade 
and investment in Central America during the 1960s, by the 
end of the decade, the region had not yet achieved the bal- 
anced industrial growth nor the diversification of extraregional 
exports that was needed to maintain the momentum of the 
CACM. 

This failure resulted in part from the Central American gov- 
ernments' inability to implement fiscal modernization or to 
overcome persistent structural trade deficits by the less devel- 
oped economies of the region. Moreover, the gradual aban- 
donment by regional economic planners of key components of 
the ECLAC model, particularly the goal of monetary union 
and the Integration Industries Convention, reduced the poten- 
tial for joint action on a broad range of common challenges. 
Lack of progress on structural reforms of the Central American 
economies meant that the CACM would exist primarily as a 
customs union, rather than become an economic community. 
By the early 1980s, Central America's profound economic 
problems and political upheavals had undermined most CACM 
activities and institutions. 

During the 1960s, Central American policy makers charged 
with implementing the ECLAC model were faced with a series 
of deeply ingrained social and political obstacles to economic 
modernization. Foremost among these were the structural 
biases in favor of traditional export agriculture that diverted 
capital from industrial investment and discouraged export 
diversification. Among the most pervasive structural biases 
were the antiquated tax systems that relied primarily on import 
tariffs as a source of revenue while undertaxing property and 
personal income. As free trade entered into force within the 
CACM, governments found themselves forfeiting a large share 



244 



Appendix B 



of their traditional revenues. In all of the republics except 
Costa Rica, political opposition to fiscal reform from the pow- 
erful landowning sector prevented governments from recover- 
ing the lost funds through property and income taxes. Pressure 
for fiscal reform was offset by a surplus of commercial bank 
credit during the 1970s, which allowed Central American gov- 
ernments to run consecutive fiscal deficits. When the flow of 
lending to Latin America ended abruptly in 1982, the burden 
of servicing Central American public and private debts caused 
a severe regional economic depression. The "lost decade" of 
the 1980s was characterized by macroeconomic instability, mas- 
sive capital flight, and severe cutbacks in public services. 

Monetary and credit policies were also strongly biased in 
favor of the traditional export sector, which enjoyed a sharp 
increase in commercial bank lending throughout the 1960s. In 
1970 a large share of domestic credit was still being channeled 
to traditional export agriculture, which received three times as 
much credit as did industry. Moreover, interest rates for tradi- 
tional agriculture were in some cases kept artificially much 
lower than the rates paid by industry and by nontraditional 
agriculture. 

Despite these inconsistencies in public policy toward indus- 
trialization, manufacturing's contribution to GDP grew mod- 
estly in all of the region except Honduras during the 1960s. 
Industrial growth associated with the CACM was generally 
more capital intensive than manufacturing for domestic mar- 
kets, where small, labor-intensive firms employing ten to twenty 
workers were the norm. Rather than producing the desired 
diversification of extraregional exports, however, Central 
America's industrial development stagnated at the stage of con- 
sumer goods production and became heavily dependent on 
capital-goods imports paid for with foreign exchange from tra- 
ditional agricultural exports. The foreign exchange constraint 
that had existed before formation of the CACM remained 
essentially unchanged, as competitive export industries ori- 
ented toward global markets failed to develop under the 
CACM's protective CET. 

Another major drawback of the CACM was its inability to 
compensate for disequilibria in capital endowments, in net 
export volume, and in productivity among more- and less- 
developed member states. As a result, intraregional trade 
imbalances became pronounced, and the CACM became 
polarized between the net creditors, Guatemala and El Salva- 



245 



Nicaragua: A Country Study 

dor, and the net debtors, Honduras and Nicaragua. Costa Rica 
evolved from a net debtor to a net creditor. 

The institutions created by the general treaty to alleviate 
structural imbalances among member states failed to operate 
as planned. One of the first CACM institutions to be deacti- 
vated was the Integration Industries Convention, which had 
been negotiated to help allocate capital investment rationally 
and fairly among member states. The convention had been a 
source of controversy from the beginning, having been 
opposed by the United States and excluded from the earlier 
Tripartite Treaty. When rivalries arose over the proposed loca- 
tion of plants, CACM institutions were unable to mediate the 
conflicts or to impose solutions. As a result, only two firms ever 
attained integration industries status, and the convention was 
effectively scrapped in the mid-1960s when a tire plant was 
established in Costa Rica to compete with an integration indus- 
tries plant in Guatemala. 

Another CACM institution that abandoned its original pur- 
pose was the Central American Clearing House. The clearing 
house had originally been designed to promote the use of local 
currencies in the settlement of intraregional trade deficits. The 
clearing house and the Central American Monetary Council 
were supposed to represent initial steps toward monetary 
union. By 1963, however, the CACM member states had 
allowed the monetary cooperation effort to lapse and were set- 
tling their trade deficits in United States dollars twice yearly. 
Little impetus remained to maintain exchange rate stability or 
currency convertibility within the CACM. 

Rupture of the CACM 

As the 1960s progressed, unbalanced growth and develop- 
ment among CACM member states began to take a serious toll 
on cooperative efforts in trade, monetary policy, and invest- 
ment promotion. By the end of the decade, the CACM had 
reverted to an amorphous grouping of economies at different 
stages of development pursuing uncoordinated and sometimes 
antagonistic macroeconomic policies. The most acute conflict 
arose between Honduras and El Salvador over the issues of 
unbalanced trade, investment, and migration. 

By the mid-1960s, chronic Honduran trade deficits with El 
Salvador and highly visible Salvadoran investment in Honduras 
had led to widespread Honduran indignation and a virtual 
Honduran boycott of Salvadoran products. Meanwhile, 



246 



Appendix B 



300,000 Salvadoran migrants displaced by the expansion of 
export agriculture in their country had settled across the bor- 
der in Honduras. Capitalizing on the widespread sentiment 
against Salvadoran "encirclement," the government of Hondu- 
ran President Oswaldo Lopez Arellano (1963-71) attempted to 
expel Salvadoran squatters under the pretext of land reform. 
Increasing tensions throughout the summer of 1969 erupted 
into hostilities on July 14, when Salvadoran air and land units 
made an incursion into Honduran territory. The ensuing four- 
day war claimed 2,000 lives and led to the forced repatriation 
of about 150,000 Salvadorans. 

Diplomatic and commercial relations between El Salvador 
and Honduras were suspended for a decade thereafter, as was 
air transport between the two countries. Honduras withdrew 
from the CACM in December 1970, after it failed to persuade 
the other member states to enact further reforms in its favor. 
Honduras subsequently conducted trade with CACM countries 
on a bilateral basis until 1986. Honduras's withdrawal from the 
CACM, although not significant in terms of lost trade volume, 
represented a symbolic collapse of the organization as a vehicle 
for promoting coordinated regional growth. The prospects for 
integration had already dimmed considerably prior to the Soc- 
cer War, as evidenced by the piecemeal abandonment of major 
components of the original ECLAC integration plan. 

Reactivation of Integration 

Despite Honduras's withdrawal from the CACM and its sus- 
pension of commercial relations with El Salvador, Central 
American intraregional trade rose steadily throughout the 
1970s, exceeding US$1 billion by 1980, before halving in the 
mid-1980s as a result of accumulated intraregional debts, the 
overall debt crisis, and the disruption caused by civil wars in El 
Salvador and Nicaragua. Most efforts to coordinate industrial 
and macroeconomic policies had been abandoned, however, 
well before the general treaty expired in 1982. 

A reactivation of Central American economic integration 
was made possible with the signing of the Central American 
Peace Agreement (Esquipulas II) in August 1987. Esquipulas II 
laid the political groundwork for concerted action to renew the 
integration system following restoration of peace and democ- 
racy in the region. Formal action to restart the integration pro- 
cess was taken at the eighth summit of Central American 
presidents, held in Antigua, Guatemala, in June 1990. The par- 



247 



Nicaragua: A Country Study 

ticipants at the Antigua summit approved the Economic Action 
Plan for Central America (Plan de Accion Economico de Cen- 
troamerica — Paeca), which foresaw a new conceptual and legal 
basis for a Central American economic community. 

The new integration initiative emphasizes insertion of the 
region's economy into the global economy based on export-led 
growth. The industrial base established under the CACM will 
be retrofitted and modernized to compete in the international 
marketplace, and nontraditional exports will be promoted 
more vigorously. Concurrently, the maximum CET for the 
region is to be reduced from 40 percent to 20 percent and is 
expected to average between 10 percent and 15 percent for 
most products. With assistance from the European Community 
(EC), now the European Union (EU), a new Central American 
Payments System is being established to settle intraregional 
debts. The main components of this new payments system are a 
revised Central American Clearing House and a Special For- 
eign Currencies Fund. The new payments system, backed by a 
120 million European Currency Unit (ECU — see Glossary) 
support fund, is designed to manage intraregional creditor- 
debtor relations multilaterally, rather than bilaterally as under 
the previous regime, so that trade deficits will be incurred 
against the system rather than against individual countries. In 
addition, the Special Currencies Fund, which is backed by an 
initial EU support fund of 30 million ECUs, will help the less 
developed countries in the region finance the building and 
improvement of export-related infrastructure. 

Further progress toward integration was made at the tenth 
Central American presidential summit, held in San Salvador, El 
Salvador, in July 1991, when the original participants agreed to 
include Panama in certain aspects of the new economic com- 
munity. The eleventh summit, held in Tegucigalpa, Honduras, 
modified several CACM institutions and incorporated them 
into the System of Central American Integration (Sistema de 
Integration Centroamericana — SICA), an umbrella organiza- 
tion encompassing both political and economic integration 
efforts. Honduras fully rejoined the integration process in Feb- 
ruary 1992, upon the signing of the Transitional Multilateral 
Free Trade Agreement with the other Central American repub- 
lics. 

Central American integration was given a further boost with 
the signing of the North American Free Trade Agreement 
(NAFTA) among Canada, Mexico, and the United States. In 



248 



Appendix B 



August 1992, a Framework Free Trade Agreement was signed 
among the five Central American republics and Mexico, estab- 
lishing the procedures for the formation of a free-trade area 
projected to enter into force in December 1996. Inclusion of 
Central America in a free-trade area with Colombia and Vene- 
zuela was also foreseen in the Caracas Commitment adopted at 
a regional summit in February 1993. Guatemala's recognition 
of Belize in September 1991 made it possible to begin free- 
trade agreement talks with the Caribbean Community and 
Common Market (Caricom), the successor to Carifta. Central 
America's economic convergence with NAFTA, the G-3 
(Mexico, Colombia, and Venezuela), and Caricom is expected 
to further the objectives of the United States-sponsored Enter- 
prise for the Americas Initiative (see Glossary), which foresees 
the eventual formation of a Western Hemisphere free-trade 
zone. 

* * * 

Several detailed studies of the institutional development of 
the CACM through the 1980s are available; however, no com- 
prehensive treatment of Central American economic integra- 
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earlier works include Economic Integration in Central America, an 
extensive 1978 study edited by William R. Cline and Enrique 
Delgado; and Victor Bulmer-Thomas's The Political Economy of 
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context of historical patterns of development in the region. 
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Centroamerica, published by the BCIE, and various numbers of 
Panorama Centroamericano, published by the Instituto Cen- 
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member states are available from various SIECA publications, 
including Cuadernos de la SIECA, Estadisticas Analiticas del Comer- 
cio Intracentroamericano, and Series Estadisticas Seleccionadas de 
Centroamerica. Current reporting of Central American eco- 
nomic developments is available from Latin American Weekly 
Report, Latin America Monitor, and the Economist Intelligence 
Unit's Country Reports and Country Profiles on Central American 
countries. (For further information and complete citations, see 
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. "Victors' Lament: To the Losers Belong the Spoils," 

New York Times,]une 8, 1991, A2. 

Cisneros, Julio, and Jose Luis Abalos, (eds.). Legislacion munici- 
pal de Nicaragua. Valencia, Spain: Generalitat Valenciana, 
1991. 

Cody, Edward. "Up to 200 Disenchanted Contras Take Up 
Arms Again," Washington Post, April 9, 1991, A15. 

Coone, Tim. "Nicaraguan Rights Battle Turns Violent," Finan- 
cial Times, June 19, 1991, 3. 

Diaz Lacayo, Aldo. Diplomacia con dignidad. Caracas, Venezuela: 
Ediciones Centauro, 1989. 



263 



Nicaragua: A Country Study 

Dickens, Samuel T. "Assassins in Managua," New York Times, 
April 16, 1991, A23. 

Dillon, Sam. "Sloppy Work Slows Contra Death Probe," Miami 
Herald, May 13, 1991, Al, All. 

Dillon, Sam, and Karen Branch. "Managua: We'll Probe Con- 
tra's Death," Miami Herald, February 18, 1991. A6. 

Doherty, William C. "Nicaragua's Second Pihata," Wall Street 
Journal, November 22, 1991, A3. 

TheEuropa World Year Book, 1988, 2. London: Europa, 1988. 

TheEuropa World Year Book, 1993, 2. London: Europa, 1993. 

Gilbert, Dennis L. Sandinistas: The Party and the Revolution. New 
York: Basil Blackwell, 1988. 

Hockstader, Lee. "Former Contra Rebels Take Up Arms Again 
in Nicaragua," Washington Post, June 29, 1991, A14, A16. 

Howard, Jan. "Chamorro Faces New Contra Demands," Miami 
Herald, August 12, 1991, A6. 

. "Nicaraguan Economic Plan Leaves Many Unem- 
ployed," Miami Herald, September 12, 1991, A12. 

. "Taiwan Gives Nicaragua Loan to Help Repay Debt," 

Miami Herald, August 27, 1991, A5. 

Hull, Jennifer Bingham. "Sandinistas Opt for Stability," Chris- 
tian Science Monitor, July 24, 1991, 3. 

Krauss, Clifford. "Chamorro Pleads with Congress for Aid," New 
York Times, April 17, 1991, A6. 

Kurian, George Thomas (ed.). Encyclopedia of the Third World, 2. 
New York: Facts on File, 1993. 

Lacayo, Antonio. "A New Nicaragua Deserves a New Reputa- 
tion," Wall Street Journal, April 12, 1991, 1. 

Meyer, Cord. "Confrontation in Nicaragua," Washington 
Times, November 15, 1991, A3. 

Oppenheimer, Andres. "Sandinistas' New Careers May Refocus 
Their Politics," Miami Herald, April 2, 1991, C2. 

Oquist, Paul. Dindmica sociopolitica de las elecciones NicaragiXenses 
de 1990. (2d ed.) Caracas: Fundacion Friedrich Ebert, 1991. 

Prevost, Gary. "The FSLN in Opposition." Pages 109-22 in Van- 
essa Castro and Gary Prevost (eds.), The 1 990 Elections in Nic- 
aragua and Their Aftermath. Lanham, Maryland: Rowman and 
Littlefield, 1992. 

Robinson, Linda. "Nicaragua's $1 Billion Battle," U.S. News and 
World Report, July 29, 1991, 35-36. 



264 



Bibliography 



Scott, David Clark. "Nicaraguan Government Seeks to Pacify 
Rearming Contras," Christian Science Monitor, August 14, 
1991, 1-2. 

Serafmo, Nina M. "Nicaragua Chronology since the February 
25, 1990, Elections: The Transition and President Chamo- 
rro's First 100 Days." (Library of Congress, Congressional 
Research Service, Report 90-423 F.) Washington: September 
5, 1990. 

. "Nicaragua's 'Civic' Opposition: Players, Problems and 

Prospects." (Library of Congress, Congressional Research Ser- 
vice, Report 87-735 F.) Washington: August 5, 1987. 

South America, Central America, and the Caribbean, 1993. London: 
Europa, 1993. 

Spalding, Rose J. Capitalists and Revolution in Nicaragua: Opposi- 
tion and Accommodation, 1979-93. Chapel Hill: University of 
North Carolina Press, 1994. 

Sullivan, Mark P. "Central America and U.S. Foreign 
Assistance: Congressional Action." (Library of Congress, Con- 
gressional Research Service, Major Issues System, IB84075.) 
Washington: December 7, 1992. 

Tamayo, Juan O. "Nicaraguan Wants U.S. to Fund Sandinista 
Army Retirements," Miami Herald, June 26, 1991, A10. 

Uhlig, Mark A. "Chamorro Party OKs Tough Property Law," 
Miami Herald, August 21, 1991, A8. 

. "Chamorro's Kin Moving Against Her," New York Times, 

January 12, 1991, A3. 

. "Nicaragua's Permanent Crisis: Ruling from Above 

and Below," Survival, 33, September-October 1991, 401-23. 

. "Sandinistas' Booty Sets Off a Bitter Battle in Nicara- 
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United States. Department of State. Communique of the Interna- 
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. Department of State. Dispatch. Nicaraguan President's 

Visit. Washington: GPO, April 29, 1991. 

Walker, Thomas W. Nicaragua: The Land of Sandino. (3d ed.) 
Boulder, Colorado: Westview Press, 1991. 



265 



Nicaragua: A Country Study 

(Various issues of the following publications were also used 
in the preparation of this chapter: Barricada [Managua] ; Chris- 
tian Science Monitor, Current History; El Nuevo Diario [Managua] ; 
Envw [Managua] ; Financial Times; Foreign Broadcast Informa- 
tion Service, Daily Report: Latin America; Journal of Inter-American 
Studies and World Affairs; Journal of Latin American Studies; La 
Prensa [Managua] ; Latin American Regional Reports. Mexico and 
Central America [London] ; Miami Herald; New York Times; Wall 
Street Journal; Washington Post; and Washington Times .) 

Chapter 5 

Americas Watch. Fitful Peace: Human Rights and Reconciliation 
under the Chamorro Government. New York: 1991. 

. Human Rights in Nicaragua: August 1987 -August 1988. 

New York: 1988. 

Booth, John A. The End and the Beginning: The Nicaraguan Revo- 
lution. Boulder, Colorado: Westview Press, 1985. 

Bras, Marisabel. "The Transformation of the Nicaraguan 
Army," How They Fight: Armies of the World. Washington: 
Department of Defense, Army Intelligence and Threat Anal- 
ysis Center, July 1993, 47-56. 

Dyer, Gwynne, and Adrian English. "Nicaragua." Pages 423-26 
in John Keegan (ed.), World Armies. Detroit: Gale Research, 
1983. 

English, Adrian J. Armed Forces of Latin America. London: Jane's, 
1984. 

TheEuropa World Year Book, 1993, 2. London: Europa, 1993. 

Gorman, Stephen M., and Thomas W. Walker. "The Armed 
Forces." Pages 91-118 in Thomas W. Walker (ed.) Nicaragua: 
The First Five Years. New York: Praeger, 1985. 

Gutman, Roy. Banana Diplomacy: The Making of American Policy 
in Nicaragua, 1981-87. New York: Simon and Shuster, 1988. 

Jane' s Fighting Ships, 1993-94. (Ed., Richard Sharp.) Alexan- 
dria, Virginia: Jane's, 1993. 

Keegan, John (ed.). World Armies. Detroit: Gale Research, 1993. 

Kornbluh, Peter. "The Covert War." Pages 21-38 in Thomas W. 
Walker (ed.), Reagan Versus the Sandinistas: The Underclared 
War on Nicaragua. Boulder, Colorado: Westview Press, 1987. 

McCoy, Jennifer L. "Nicaragua in Transition," Current History, 
90, No. 554, March 1991, 117-20. 



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Bibliography 



The Military Balance, 1993-94. London: Institute for Strategic 
Studies, 1993. 

Montes, Julio. "Nicaragua in Crisis," Jane's Intelligence Review 

[London], 6, No. 1, January 1994, 45-47. 
Norsworthy, Ken, and Tom Barry. Nicaragua: A Country Guide. 

Albuquerque, New Mexico: Inter-Hemispheric Education 

Resource Center, 1990. 
Political Handbook of the World, 1993. New York: McGraw Hill, 

1993. 

Rosset, Peter, and John Vandermeer (eds.). Nicaragua: Unfin- 
ished Revolution: The New Nicaragua Reader. New York: Grove 
Press, 1986. 

United States. Arms Control and Disarmament Agency. World 
Military Expenditures and Arms Transfers, 1990. Washington: 
GPO, 1991. 

. Congress. 102th, 2d Session. Senate. Committee on 

Foreign Relations. Nicaragua Today: A Republican Staff Report 
to the Committee on Foreign Relations, United States Senate. Wash- 
ington: GPO, 1992. 

. Department of State. Background Notes: Nicaragua. 

Washington: GPO, 1993. 

. Department of State. Country Reports on Human Rights 

Practices for 1990. (Report submitted to United States Con- 
gress, 102d, 1st Session, Senate, Committee on Foreign 
Relations and House of Representatives, Committee on For- 
eign Affairs.) Washington: GPO, 1991. 

. Department of State. Country Reports on Human Rights 

Practices for 1991. (Report submitted to United States Con- 
gress, 102d, 2d Session, Senate, Committee on Foreign Rela- 
tions and House of Representatives, Committee on Foreign 
Affairs.) Washington: GPO, 1992. 

. Department of State. Country Reports on Human Rights 

Practices for 1992 (Reported submitted to United States Con- 
gress, 103rd, 1st Session, Senate, Committee on Foreign 
Relations and House of Representatives, Committee on For- 
eign Affairs.) Washington: GPO, 1993. 

. Human Rights in Nicaragua under the Sandinistas: From 

Revolution to Repression. Washington: GPO, 1986. 

. Inside the Sandinista Regime: A Special Investigator's Per- 
spective. Washington: GPO, 1986. 



267 



Nicaragua: A Country Study 

. Nicaragua's Interior Ministry: Instrument of Political Con- 
solidation. Washington: GPO, 1987. 

Vanderlaan, Mary B. Revolution and Foreign Policy in Nicaragua. 
Boulder, Colorado: Westview Press, 1986. 

Walker, Thomas W. Nicaragua: The Land of Sandino. (3d ed.) 
Boulder, Colorado: Westview Press, 1991. 

Walker, Thomas W. (ed.). Nicaragua: The First Five Years. New 
York: Praeger, 1985. 

. Reagan Versus the Sandinistas: The Undeclared War on Nic- 
aragua. Boulder, Colorado: Westview Press, 1987. 

(Various issues of the following periodicals were also used in 
the preparation of this chapter: The Economist [London]; Econ- 
omist Intelligence Unit, Country Report: Nicaragua, Honduras 
[London]; Facts on File; Jane's Intelligence Review [London]; 
Latin American Monitor: Central America [London] ; Latin Ameri- 
can Regional Reports: Caribbean and Central American Report [Lon- 
don]; New York Times; and Washington Post.) 

Appendix B 

Bulmer-Thomas, Victor. The Political Economy of Central America 
since 1920, Cambridge: Cambridge University Press, 1987. 

. Studies in the Economics of Central America. New York: St. 

Martin's Press, 1988. 

Cline, William R., and Enrique Delgado (eds.). Economic Inte- 
gration in Central America. Washington: Brookings Institution, 
1978. 

Edwards, Sebastian. "Latin American Economic Integration: A 
New Perspective on an Old Dream," The World Economy, 16, 
No. 3, May 1993, 317-37. 

Salazar, Jose Manuel. "Present and Future Integration in Cen- 
tral America," Cepal Review, No. 42, December 1990, 157-80. 

Secretana Permanente del Tratado General de Integracion 
Economica Centroamericana. Cuadernos de la SIECA, No. 1 7: 
25 anos de integracion (en cifras). Guatemala City: 1986. 

. Series Estadisticas Seleccionadas de Centroamerica. Guate- 
mala City, No. 24, May 1991. 

(Various issues of the following publications were also used 
in the preparation of this appendix: Estadisticas analiticas del 
comercio Intracentroamericano [Guatemala City] ; Economist Intel- 
ligence Unit, Country Report: Guatemala, El Salvador [London]; 



268 



Bibliography 



Economist Intelligence Unit, Country Report: Nicaragua, Hondu- 
ras, [London]; Economist Intelligence Unit, Country Report: 
Panama, Costa Rica [London] ; Latin American Monitor: Central 
America [London]; Latin American Weekly Report [London]; 
Panorama Centroamericano [Guatemala City]; and Revista de la 
integraciony el desarollo de Centroamerica [Tegucigalpa].) 



269 



Glossary 



Central America — Here, used in a geographic sense. Central 
America is considered to be the entire isthmus between 
Mexico and Colombia, including present-day Belize, Gua- 
temala, Honduras, El Salvador, Nicaragua, Costa Rica, and 
Panama. A more traditional political view of the term, 
most often used in the region itself, is that Central Amer- 
ica encompasses only the five successor states to the 
United Provinces of Central America (1821-38): Guate- 
mala, Honduras, El Salvador, Nicaragua, and Costa Rica. 

compadrazgo — Literally, "copaternity." A system of ritual "copar- 
enthood" that links parents, children, and godparents in a 
close social or economic relationship. 

Constituent Assembly — A deliberative body made up of elected 
delegates who are charged with the responsibility of draft- 
ing a new constitution and, in some instances, electing a 
new president. Traditionally, after it completes its work, a 
Constituent Assembly reverts to a Congress (former title of 
Nicaraguan legislatures), which then serves as the coun- 
try's legislative body until the next scheduled elections. 

Contadora — A diplomatic initiative launched by a January 
1983 meeting on Contadora Island off the Pacific coast of 
Panama, by which the "Core Four" mediator countries of 
Mexico, Venezuela, Colombia, and Panama sought to pre- 
vent through negotiations a regional conflagration among 
the Central American states of Guatemala, El Salvador, 
Honduras, Nicaragua, and Costa Rica. In September 1984, 
the negotiating process produced a draft treaty, the Conta- 
dora Acta, which was judged acceptable by the govern- 
ment of Nicaragua but rejected by the other four Central 
American states concerned. The process was suspended 
unofficially in June 1986 when the Central American gov- 
ernments refused to sign a revised Acta. The Contadora 
process was effectively superseded by direct negotiations 
among the Central American states. 

Contra — Short form of contrarevolucionario (counterrevolution- 
ary). Member of the Nicaraguan Resistance, an armed 



271 



Nicaragua: A Country Study 

resistance movement in the 1980s supported by the 
United States and fighting against the national Sandinista 
government. 

cordoba (C$) — Nicaraguan monetary unit from 1912 to 1988. 
Relatively stable for most of that period, the cordoba's 
value plummeted in 1985. By mid-1988 the official rate was 
US$1 = C$20,000 (US$1 = C$60,000 on the black market), 
and the cordoba was replaced by the new cordoba (C$n; 
q.v.) at a rate of 1,000 cordobas to 1 new cordoba. 

Creole — In Nicaragua a term used for an English-speaking per- 
son of African or mixed African and indigenous ancestry. 

Enterprise for the Americas Initiative (EAI) — A plan an- 
nounced by President George H.W. Bush on June 2V, 

1990, calling for the United States to negotiate agreements 
with selected Latin American countries to reduce their 
official debt to the United States and make funds available 
through this restructuring for environmental programs; to 
stimulate private investment; and to take steps to promote 
extensive trade liberalization with the goal of establishing 
free trade throughout the Western Hemisphere. 

European Currency Unit (ECU) — Instituted in 1979, the ECU 
is the unit of account of the European Union (EU). The 
value of the ECU is determined by the value of a basket 
that includes the currencies of all EU member states. In 
establishing the value of the basket, each member's cur- 
rency receives a share that reflects the relative strength 
and importance of the member's economy. One ECU was 
equivalent to about US$1.15 in 1993. 

fiscal year (FY) — Nicaragua's fiscal year is the calendar year. 
Where reference is made to United States aid appropria- 
tions or disbursements, the United States government's FY, 
which runs from October 1 to September 30, is used with 
the date of reference drawn from the year in which the 
period ends. For example, FY 1992 began on October 1, 

1991, and ended on September 30, 1992. 

gold cordoba (C$o, sometimes C$) — Nicaraguan monetary 
unit divided into 100 centavos. Introduced in mid-1990, 
the gold cordoba replaced the new cordoba at a rate of 1 
gold cordoba to 5 million new cordobas (q.v.). In mid- 
1993, US$1 = C$o6.15. 



272 



Glossary 



gross domestic product (GDP) — A measure of the total value of 
goods and services produced by the domestic economy 
during a given period, usually one year. Obtained by add- 
ing the value contributed by each sector of the economy in 
the form of profits, compensation to employees, and 
depreciation (consumption of capital). Only domestic 
production is included, not income arisiffg from invest- 
ments and possessions owned abroad, hence the use of the 
word domestic to distinguish GDP from gross national prod- 
uct (q.v.). 

gross national product (GNP) — The total market value of all 
final goods and services produced by an economy during a 
year. Obtained by adding the gross domestic product (q.v.) 
and the income received from abroad by residents and 
subtracting payments remitted abroad to nonresidents. 

import-substitution industrialization (ISI) — An economic 
development strategy that emphasizes the growth of 
domestic industries, often by import protection using tar- 
iff and nontariff measures. Proponents favor the export of 
industrial goods over primary products. 

International Monetary Fund (IMF) — Established along with 
the World Bank (q.v.) in 1945, the IMF is a specialized 
agency affiliated with the United Nations (UN) that takes 
responsibility for stabilizing international exchange rates 
and payments. The main business of the IMF is the provi- 
sion of loans to its members when they experience bal- 
ance-of-payments difficulties. These loans often carry 
conditions that require substantial internal economic 
adjustments by the recipients. 

liberation theology — An activist movement led by Roman Cath- 
olic clergy who trace their inspiration to Vatican Council II 
(1965), where some church procedures were liberalized, 
and the Second Latin American Bishops' Conference in 
Medellin, Colombia (1968), which endorsed greater direct 
efforts to improve the lot of the poor. Advocates of libera- 
tion theology — sometimes referred to as "liberationists" — 
work mainly through Christian Base Communities (Comu- 
nidades Eclesiasticas de Base — CEBs). Members of CEBs 
meet in small groups to reflect on scripture and discuss its 
meaning in their lives. They are introduced to a radical 



273 



Nicaragua: A Country Study 

interpretation of the Bible, one that employs Marxist ter- 
minology to analyze and condemn the wide disparities 
between the wealthy elite and the impoverished masses in 
most underdeveloped countries. This reflection often 
leads members to organize to improve their living stan- 
dards through cooperatives and civic improvement 
projects. 

new cordoba (C$n) — Nicaraguan monetary unit from 1988 to 
1990. Replaced the former currency, the cordoba (q.v.), in 
an attempt to control inflation; the value of the new cor- 
doba dropped to US$1 = C$n3.2 million in less than three 
years. Replaced by the gold cordoba (q.v.) in 1990 at a rate 
of 5 million new cordobas to 1 gold cordoba. 

San Jose Accord — An agreement between Mexico and Venezu- 
ela, signed in 1980 in San Jose, Costa Rica, whereby the 
two oil producers committed themselves to supply crude 
oil on concessionary terms to ten Central American and 
Caribbean nations. 

Sandinista — Originally a member of the Marxist group 
attempting to overthrow the Somozas or their hand-picked 
president in the 1960s and 1970s. The group took its name 
from Augusto Cesar Sandino, who led a guerrilla struggle 
against United States occupation of Nicaragua in the 
1930s. The political arm of the group, the Sandinista 
National Liberation Front (Frente Sandinista de Li- 
beracion Nacional — FSLN), was the national government 
of Nicaragua from July 1979 to April 1990. After the late 
1970s, the term Sandinista is used for a member or sup- 
porter or the FSLN or as the adjectival form of the FSLN. 

World Bank — The informal name used to designate a group of 
four affiliated international institutions: the International 
Bank for Reconstruction and Development (IBRD), the 
International Development Association (IDA), the Inter- 
national Finance Corporation (IFC), and the Multilateral 
Investment Guarantee Agency (MIGA). The IBRD, estab- 
lished in 1945, has the primary purpose of providing loans 
at market-related rates of interest to developing countries 
at more advanced stages of development. The IDA, a 
legally separate loan fund but administered by the staff of 
the IBRD, was set up in 1960 to furnish credits to the poor- 



274 



Glossary 



est developing countries on much easier terms than those 
of conventional IBRD loans. The IFC, founded in 1956, 
supplements the activities of the IBRD through loans and 
assistance designed specifically to encourage the growth of 
productive private enterprises in less developed countries. 
The MIGA, founded in 1988, insures private foreign 
investment in developing countries against various non- 
commercial risks. The president and certain officers of the 
IBRD hold the same positions in the IFC. The four institu- 
tions are owned by the governments of the countries that 
subscribe their capital. To participate in the World Bank 
group, member states must first belong to the Interna- 
tional Monetary Fund (q.v.). 



275 



Index 



abortion, 83 

Accessory Transit Company, 13 
acquired immune deficiency syndrome 

(AIDS), 77 
agrarian reform. See land reform 
Agrarian Reform Law (1981), 39, 68-69, 

110-11 

agricultural: cooperatives, 69, 111; devel- 
opment, 115, 134; policy, 126-27 

agricultural production, 126-27; in civil 
war, xxxii, 36, 43; and natural disas- 
ters, 48, 126; neglect of, xxvi 

agricultural products (see also under indi- 
vidual crops), 5, 125-26, 127-30; diversi- 
fication of, 101, 126; export of, 10, 17, 
18, 101, 116, 126;nontraditional, 126 

agriculture, 125-31; decline in, 126; 
employment in, 119; export crops, 
107; indigenous, 100; nationalization 
in, 108; as percentage of gross domes- 
tic product, 126, 127; slash-and-burn , 
5; subsistence, 92 

Aguado, Enoc, 27 

Agiiero, Fernando, 29 

AID. See United States Agency for Inter- 
national Development 

AIDS. See acquired immune deficiency 
syndrome 

air force, 209, 211-12; bases, 212; mate- 
riel, 200, 212; number of personnel, 
212; radar, 212; restructured, 200; 
training, 200 

Aleman, Arnoldo, 162 

Alianza Popular Conservadora. See Con- 
servative Popular Alliance 

Alianza Revolucionaria Democratica. See 
Democratic Revolutionary Alliance 

American Baptist Church, 86 

Americas Watch, 219, 223 

Amnesty International, 40 

amnesty law, 174, 194, 216 

AMNLAE. See Luisa Amanda Espinoza 
Nicaraguan Women's Association 

Andean Group, 239 

ANDEN. See National Association of Nic- 



araguan Teachers 

Antigua (Guatemala), 8 

APC. See Conservative Popular Alliance 

Arce Castano, Bayardo, 181 

archaeological excavations, 4 

Arde. See Democratic Revolutionary Alli- 
ance 

Arguello, Leonardo: as president, 27 
Argiiello Morales, Miriam, 161, 162 
Arias Davila, Pedro (Pedrarias) , 8 
Arias Plan (Esquipulas II) (1987), 47-48, 

149, 160, 187, 247 
Arias Sanchez, Oscar, 47-48 
armed forces (see also National Guard; 
Sandinista People's Army), 207-13; 
commander of, xxxvii, 143, 146, 193, 
207-9; demobilization of, xxxvii, 48, 
74, 115-16, 153, 193, 209; foreign 
influences on, 202-5; in government 
transition, 146; history of, 194-95; 
human rights violations by, 219; mili- 
tary assistance to, 202-5; missions of, 
209-11; number of personnel in, xxx- 
vii, 193, 209; organization of, 209; 
political role of, xxxvii; reform of, 209; 
restructuring of, 209; Sandinista con- 
trol of, xxxv, 146, 153, 193; Somoza 
family control of, 25; under Zelaya, 
195 

army, 211; commander of, xxxvii, 143, 
146; creation of, xxvii; materiel of, 
211; number of troops in, 211; organi- 
zation of, 211 

Army for the Defense of Nicaraguan Sov- 
ereignty (Ejercito Defensor de la 
Soberama de Nicaragua — EDSN), 22, 
24; destruction of, 24; number of per- 
sonnel in, 22 

Asociacion de Mujeres Nicaragiienses 
Luisa Amanda Espinoza. See Luisa 
Amanda Espinoza Nicaraguan 
Women's Association 

Asociacion de Trabajadores del Campo. 
See Association of Agricultural Work- 
ers 



277 



Nicaragua: A Country Study 



Asociacion Nacional de Educadores de 

Nicaragua. See National Association of 

Nicaraguan Teachers 
Assemblies of God, 85, 86 
Association of Agricultural Workers 

(Asociacion de Trabajadores del 

Campo— ATC), 122, 172 
ATC. See Association of Agricultural 

Workers 

Audiencia of Guatemala, 8-9; indepen- 
dence of, from Spain, xxvi, 11-12 

Audiencia of Panama, 8 

Augusto C. Sandino International Air- 
port, 1 36 

Authentic Popular Social Christian 
Party (Partido Popular Social Cris- 
tiano Autentico — PPSCA): in election 
of 1984, 46 

Baena Soares, Joao, 145 

balance of payments, 116 

balance of trade, 117, 245-46 

Bamer. See Bank of America 

Banamerica Group, 68, 103 

bananas, 101, 125-26, 128-30; export of, 

xxvii, 17, 18, 116; production, 128, 130 
Banco Central de Nicaragua. See Central 

Bank of Nicaragua 
Banco Centroamericano de Integracion 

Economica (BCIE), 242 
Banco de America. See Bank of America 
Banco Mercantil. See Mercantile Bank 
Banco Nacional de Desarrollo. See 

National Development Bank 
Banco Nicaragiiense de Industria y Co- 

mercio. See Nicaraguan Bank of Indus- 
try and Commerce 
Banco Popular. See People's Bank 
Banic. See Nicaraguan Bank of Industry 

and Commerce 
Banic Group, 68, 103 
Bank of America (United States), 112 
Bank of America (Banco de America — 

Bamer), 112 
banking system, 112-13; in bankruptcy, 

xxxiv, 39; restructuring of, 112 
banks: commercial, 112; nationalized, 

39, 68, 108, 112; private, 112; Somoza 

Garcia' s control of, xxx 
Baptist Convention of Nicaragua, 85, 86; 

political orientations of, 88 
Barricada, 181 



Batallones de Lucha Irregulares. See 

Irregular Warfare Battalions 
Bawihka people, 6 
Bay of Pigs invasion, 29 
BCIE. See Banco Centroamericano de 

Integracion Economica 
beef, 126; consumption of, 124; export 

of, 67, 72, 116 
Belli, Humberto, 179 
Bermudez Varela, Enrique, 170, 185, 215 
birth control, 64, 82-83 
Bishops' Conference of Nicaragua, 179 
black market, 68, 70, 124; in currency, 

113 

BLIs. See Irregular Warfare Battalions 
Bluefields, 90; air force base, 212; port 

of, 135, 136 
BND. See National Development Bank 
Bolanos Geyer, Enrique, 160 
Bonanza mine, 131 
border disputes, 196 
Borge Martinez, Tomas, 32, 33, 39 
Bosawas nature reserve, 132, 134 
Bourbons, 10 

Brenesjarquin, Carlos, 173 

Britain: claim of, to Caribbean coast, 
xxvi, 10, 12, 13, 90, 194; military assis- 
tance by, 18; military intervention of, 
xxvii; pirates from, xxvi, 9, 90 

Broad Opposition Front (Frente Amplio 
de Oposicion — FAO), 35-36; formed, 
35; members of, 35 

budget deficit, 102, 115-16, 245; under 
Sandinistas, 115; under Somoza, 115 

Bulgaria: advisers from, 204; relations 
with, 203 

Bush, George H. W., 49 

CACM. See Central American Common 
Market 

Camara Centroamericana de Com- 
pensacion de Monedas. See Central 
American Clearing House 

CAMS. See Central American Microwave 
System 

canal, transisthmian, xxvi, xxvii; aban- 
doned, 16-17; rights to build, 13, 18, 
19 

Caracas Commitment (1993), 249 
Cardenal Martinez, Ernesto, 43 
Caribbean Basin Initiative (CBI), 183 
Caribbean Community and Common 



278 



Index 



Market (Caricom), 249 
Caribbean Free Trade Association (Car- 
ifta), 239 

Caribbean lowlands, 5, 18, 55; agricul- 
ture in, 92; British control of, 10, 12, 
13, 89, 194; British-Spanish rivalry 
over, 10, 89; cultural makeup of, xxxiv, 
4-5, 55, 89-90; demography of, 91; 
electricity in, 137; population in, 65, 
66; poverty in, 72; religion in, 90; San- 
dinista Revolution in, 92-94; society in, 
89-91; Somoza regime in, 92; topogra- 
phy of, 59; United States in, 89 

Caricom. See Caribbean Community and 
Common Market 

Carifta. See Caribbean Free Trade Associ- 
ation 

Carter, Calvin B., 20 

Carter, Jimmy, 33, 42, 145; and delega- 
tion of election supervisors, 49, 144, 
160, 207 

Castillo-Knox Treaty (1914), 20 

Castro Ruz, Fidel, 29 

Catholic Church, Roman, 86-88, 179; 
education under, 84; liberation theol- 
ogy in, 86; as official religion, 84; 
opposition of, to birth control, 64, 83; 
opposition of, to Chamorro, 179; 
opposition of, to Sandinistas, 43; 
opposition of, to Somoza Debayle, 
xxxi, 30, 34, 86-88; opposition to, 10; 
outreach of, 84; role of, 84, 160; sup- 
port for, 10 

Catholicism, Roman: introduction of, 6, 
84 

Catholics, Roman: geographic distribu- 
tion of, xxxiv, 90; practicing, 85 

cattle: export of, 28, 100; investment in, 
118; raising, xxvi, 17, 100; ranchers, 
xxvi; ranches owned by Somoza 
Garcia, xxx 

CAUS. See Federation for Trade Union 
Action and Unity 

CBI. See Caribbean Basin Initiative 

CD. See Democratic Coordinator Com- 
mittee 

CDN. See Nicaraguan Democratic Coor- 
dinating Group 

CDSs. See Sandinista Defense Commit- 
tees 

CEBs. See Christian Base Communities 
Celade. See Latin American Center for 



Demography 
censorship, 28, 32, 34, 45, 47 
census, 60 

Center Group (Grupo de Centro — GC) , 
xxxvii, 157 

Central America: relations in, 186-87; 
trade in, 186-87, 239-49 

Central American Clearing House 
(Camara Centroamericana de Com- 
pensation de Monedas), 242, 246, 248 

Central American Common Market 
(CACM), 101-2, 117, 239-49; collapse 
of, 102, 240, 246-47; established, 29; 
impact of, on trade, 242-43; members 
of, 29, 239; revived, 187, 240, 247-49; 
stagnation of, 244-46; United States 
aid to, 242 

Central American Convention of Fiscal 
Incentives for Industrial Develop- 
ment (Convenio Centroamericano de 
Incentivos Fiscales al Desarollo Indus- 
trial) (1962), 243 

Central American Corporation of Air 
Navigation Services (Corporacion 
Centroamericana de Servicios de 
Navegacion Aerea — Cocesna) , 243-44 

Central American Maritime Commission 
(Comision Centroamericana de Trans- 
porte Maritimo — Cocatram) , 244 

Central American Microwave System 
(CAMS), 137 

Central American Monetary Council 
(Consejo Monetario Centroameri- 
cano), 242, 246 

Central American Parliament, 187 

Central American Payments System, 248 

Central American Peace Agreement. See 
Arias Plan 

Central American Railways Commission 
(Comision Centroamericana de Ferro- 
carriles — Cocafer), 244 

Central American summits, 247-48; of 
1988, 48; of 1990, 186-87, 247-48; of 
1991, 248; of 1992, 248 

Central American Tariff Equalization 
Convention (Convenio Centroameri- 
cano sobre Euiparacion de Grava- 
menes a la Importation), 241 

Central American University (Univer- 
sidad de Centroamerica — UCA), 180 

Central Bank of Nicaragua (Banco Cen- 
tral de Nicaragua) , 103, 112, 113, 156 



279 



Nicaragua: A Country Study 



Central de Accion y Unidad Sindical. See 
Federation for Trade Union Action 
and Unity 

central highlands, 55, 100; cultural 

makeup of, xxxiv, 4-5, 55; population 

in, 65, 66; topography of, 56-59 
Central Latinoamericana de Trabaja- 

dores. See Confederation of Latin 

American Workers 
Central Sandinista de Trabajadores. See 

Sandinista Workers' Federation 
Centro Latino-Americano de Demo- 

grafia. See Latin American Center for 

Demography 
Cerna Juarez, Lenin, 218 
Cesar Aguirre, Alfredo, xxxv, xxxvi, 157, 

158, 161, 162, 168; attacks by, on 

Humberto Ortega, xxxvi 
CGT-I. See General Confederation of 

Workers-Independent 
Ghamorro, Diego Manuel: as president, 

20 

Chamorro, Emiliano, 25; as president, 

20, 21; resignation of, 21 
Chamorro, Fruto, 14 
Chamorro, Violeta Barrios de, 185; as 
armed forces commander in chief, 
193, 209; in elections of 1990, xxxiii, 
49-50, 160; end of support for, xxxvi- 
xxxvii; as minister of defense, 193, 
209; as president, 4; in Council of 
State, 40; in Revolutionary Junta, 38 
Chamorro administration: defense 
spending by, 214; distribution of 
power in, 144; economy under, 105-7, 
114, 119, 158-59; foreign aid under, 
182; foreign relations under, 182-89; 
labor under, 171; land reform under, 
111; opposition to, 111, 144, 154, 179; 
privatization by, 70, 110; problems of, 
xxxiv-xxxv, xxxvii, 153-56; support for, 
105; transition to, 144-45 
Chamorro-Bryan Treaty (1916), 20 
Chamorro Cardenal, Pedro Joaquin, 30, 

181; assassinated, 34 
Chamorro Cardenal, Xavier, 182 
Chamorro Vargas, Emiliano, 18, 28 
China, People's Republic of: relations 
with, 189 

China, Republic of (Taiwan): relations 

with, 189 
Chontal people, 5 



Chorotegano people, 5 

Christian Base Communities (Comu- 

nidades Eclesiasticas de Base — CEBs), 

86-88, 89 

Christian Democratic International, 160 
Christian Social Party (Partido Social 
Cristiano— PSC), 150; in 1967 elec- 
tion, 29 
Church of God, 85 

Church of Jesus Christ of Latter Day 
Saints (Mormons), 85 

Church of the Nazarene, 85 

church-state relations, 88, 89 

CIA. See United States Central Intelli- 
gence Agency 

Cisneros Leiva, Sofomas, 1 79 

Citibank, 112 

Civil Inspection Unit, 217 

civil rights: suspension of, 28, 43, 47, 221 

civil wars: of 1826-29, xxvii; of 1854-55, 
14-16, 194; of 1909, 19; of 1926-33, 21, 
195 

class structure, 67-70 

Clat. See Confederation of Latin Ameri- 
can Workers 

Clayton-Bulwer Treaty (1850), 13-14, 194 

climate, 59-60; rainfall, 60; temperature, 
59 

CNMN. See National Teachers' Confeder- 
ation of Nicaragua 

Cocafer. See Central American Railways 
Commission 

Cocatram. See Central American Mari- 
time Commission 

Cocesna. See Central America Corpora- 
tion of Air Navigation Services 

coffee, 125, 126, 127-28; boom, xxx, 100- 
101; export of, 17, 67, 72, 116; invest- 
ment in, 118; prices, 101, 102; taxes 
on, 115 

coffee plantations: labor on, 83; owned 
by Somoza Garcia, xxx; subsidies for, 
100 

coffee production, 17, 127-28; in civil 

war, xxxiii; expansion of, xxvii, 18; 

land for, 127 
Colombia: in Group of Three, 249; loan 

from, 1 1 8 
Columbus, Christopher, xxv 
Comandante Cero (Commander Zero). 

SeePastora Gomez, Eden 
Comision Centroamericana de Ferroca- 



280 



Index 



rriles. See Central American Railways 
Commission 

Comision Centroamericana de Trans- 
pose Maritime See Central American 
Maritime Commission 

Comision Tecnica de las Telecomunica- 
ciones de Centroamerica. See Regional 
Telecommunications Commission 

Comites de Defensa Sandinista. See San- 
dinista Defense Committees 

Commander Dimas. See Laguna Rayo, 
To mas 

Commander Indomable. See Moran 

Flores, Jose Angel 
Commander Ruben. See Sobalvarro 

Garcia, Oscar Manuel 
Commander Zero. See Pastora Gomez, 

Eden 

Committee of Economic Cooperation, 
240-41 

Committee of National Salvation, 175 
communications. See telecommunica- 
tions 

Communist Party of Nicaragua (Partido 
Comunista de Nicaragua — Pcden): in 
election of 1984, 46 

Comtelca. See Regional Telecommunica- 
tions Commission 

Comunidades Eclesiasticas de Base. See 
Christian Base Communities 

Conapro-Heroes y Martires. See Heroes 
and Martyrs-National Confederation 
of Professional Associations 

concertacion agreement (1990), 176, 178- 
79 

Confederacion de Trabajadores Nica- 

ragiienses. ^Confederation of Nica- 

raguan Workers 
Confederacion de Unificacion Sindical. 

See Confederation for Trade Union 

Unity 

Confederacion General de Trabajadores- 
Independiente. See General Confeder- 
ation of Workers-Independent 

Confederation of Latin American Work- 
ers (Central Latinoamericana de Tra- 
bajadores — Clat) , 1 73 

Confederation of Nicaraguan Workers 
(Confederacion de Trabajadores Nica- 
raguenses— CTN), 159, 173 

Confederation for Trade Union Unity 
(Confederacion de Unificacion Sindi- 



cal— CUS), 159, 173 

Confederacion Nacional de Asociaciones 
Profesionales-Heroes y Martires. See 
Heroes and Martyrs-National Confed- 
eration of Professional Associations 

Confederacion Nacional de Maestros 
Nicaragiienses. See National Teachers' 
Confederation of Nicaragua 

Congreso Permanente de Trabajadores. 
See Permanent Congress of Workers 

Congress: abolished, 40; Somoza Garcia 
named president by, xxix 

Consejo Monetario Centroamericano. 
See Central American Monetary Coun- 
cil 

Consejo Municipal. See Municipal Coun- 
cil 

Consejo Superior de la Empresa Privada. 
See Superior Council of Private Enter- 
prise 

Conservative International, 160 

Conservative National Action Party 
(Partido de Accion Nacional Conser- 
vadora— PANC), 161 

Conservative Party (Partido Conserva- 
dor), 17, 25; in Broad Opposition 
Front, 35; in 1967 election, 29 

Conservative Popular Alliance (Alianza 
Popular Conservadora — APC), 161 

conservative-liberal conflict, xxvi, xxviii, 
11, 17; truce in, xxviii 

conservatives (see also conservative-liberal 
conflict), 103; cooperation of, with lib- 
erals, 16, 194-95; protectionist trade 
policy of, xxvi; rebellions by, 18; sup- 
port of, for Roman Catholic Church, 
10 

Constituent Assembly, 12, 16, 19, 26, 27 
constitutional convention, 17 
constitution of 1893, 17-18 
constitution of 1950, 28; abolished, 40 
constitution of 1987, 147-53; executive 

under, 147-49; legislature under, 149 
construction: as percentage of gross 

domestic product, 124; of ports, xxvii; 

of railroads, xxvii; of roads, xxvii; of 

schools, xxvii 
consumer goods, 243, 245; imports of, 

116,117 
Contadora Group, 47 
contrarevolucionarios. See Contras 
Contras (Nicaraguan Resistance), 168- 



281 



Nicaragua: A Country Study 



71, 205-7; amnesty for, 48; demobiliza- 
tion of, xxxv, 50, 156, 168, 169, 193, 
207; expulsion of, 168; guerrilla activi- 
ties of, 42; human rights violations by, 
219; land confiscated from, 110; mate- 
riel for, 206; members of, 42, 205-6; 
military support for, xxxiii, 205-6; 
negotiations of, with Sandinistas, 
xxxiii, 47, 48-49; political orientations 
of, 88; resettlement of, 156, 168, 169; 
United States support for, xxxii, 42, 
47, 204 

Contra war, 73; destruction in, 74, 132; 
spending on, 43, 73 

Convenio Centroamericano de Incenti- 
ves Fiscales al Desarollo Industrial. See 
Central American Convention of Fis- 
cal Incentives for Industrial Develop- 
ment 

Convenio Centroamericano sobre Equi- 
paracion de Gravamenes a la Impor- 
tacion. See Central American Tariff 
Equalization Convention 

Coordinadora Democratica. See Demo- 
cratic Coordinator Committee 

Coordinadora Democratica Nica- 
ragiiense. S^Nicaraguan Democratic 
Coordinating Group 

Cordova Rivas, Rafael, 162 

Corfin. See Financial Corporation of Nic- 
aragua 

Corinto: naval base, 213; port of, 135 
Corporacion Centroamericana de Servi- 
cios de Navegacion Aerea. See Central 
American Corporation of Air Naviga- 
tion Services 
Corporacion Financiera de Nicaragua. 
See Financial Corporation of Nicara- 
gua 

corruption, 27; in government, 30; in 
military, 197 

Cosep. See Superior Council of Private 
Enterprise 

Costa de Mosquitos (See also Mosquito 
Coast), 59, 89 

Costa Rica: free-trade treaty of, 240; as 
member of Central American Com- 
mon Market, 29, 239; military assis- 
tance from, 202 

cotton, 125; export of, 26, 28, 67, 72, 
101, 116, 127; investment in, 118; 
labor in, 83; prices, 102; production, 



xxxiii, 128; taxes on, 115 

Council of State (see also Revolutionary 
Junta), 40-41; appointment of, xxxii, 
40; resignations from, 40, 159 
coups d'etat: attempted, 28; of 1925, 195; 

of 1947, 27 
courts: abolished, 40; military, 223; 

police, 223 
CPT. See Permanent Congress of Workers 
Creoles, 9; resentment of peninsulares, 11 
Creoles, 90-91; anti-Sandinista protests 
by, 93; geographic distribution of, 66, 
89, 90-91; as percentage of popula- 
tion, 65-66; religion of, 86; social posi- 
tion of, 91 

crime: drug-related, 218; rate, 217; types 
of, 217-18 

criminal justice system (see also judicial 
system; courts), 194, 221-24; backlogs 
in, 222; defendants' rights in, 223, 224 

CST. SggSandinista Workers' Federation 

CTN. See Confederation of Nicaraguan 
Workers 

Cuadra Lacayo, Joaquin, 109 

Cuba: advisers from, 203-4; aid from, 3, 
202; materiel from, 202; military train- 
ing by, 41, 198, 199, 200, 202, 204, 216; 
petroleum imported from, 138; rela- 
tions with, 1 88; trade with, 116,117 

Cuban Revolution (1959), 29 

cultures: geographic distribution of, 

xxxiv, 55; precolonial, 4-5 
currency, 113-14; attempts to stabilize, 

114; depreciation of, 114; devaluation 
of, 113, 114; exchange rate, 113; intro- 
duction of new, 105, 107, 114 
CUS. See Confederation for Trade Union 
Unity 

Cuscutlatan (El Salvador), 4 
customs duties, 115, 124, 196; common, 
239-40; United States control of, xxviii 
Czechoslovakia: materiel from, 212 

Davis, Charles H., 16 

defense spending, 213-14; by Chamorro, 
214; in civil war, xxxii, 103; as percent- 
age of gross domestic product, 214; as 
percentage of gross national product, 
214; by Sandinistas, 43, 73, 105, 214; 
by Somoza Debayle, 36, 103, 214 

Democratic Conservative Party (Partido 
Conservador Democrata — PCD), 159; 



282 



Index 



in election of 1984, 46; factions of, 162 

Democratic Coordinator Committee 
(Coordinador Democrat! ca — CD): in 
election of 1984, 46; members of, 46 

Democratic Liberation Union (Union 
Democratica de Liberacion — Udel), 
30-32; in Broad Opposition Front, 35; 
established, 30 

Democratic Party of National Con- 
fidence (Partido Democrata de Con- 
fianza Nacional— PDCN) ,161 

Democratic Revolutionary Alliance 
(Alianza Revolucionaria Demo- 
cratico— Arde), 205, 206 

demography, 60-66 

demonstrations. See political demonstra- 
tions 

D'Escoto Brockman, Miguel (Jeronimo), 
43 

DGSE. See General Directorate of State 
Security 

Diaz, Adolfo, 22; as president, 19, 20, 21 
Diaz Davila, Mauricio, 164 
Diaz Lacayo, Aldo, 167 
DID. See Directorate of Defense Informa- 
tion 
diet, 72 

Direccion de Informacion para la 

Defensa. See Directorate of Defense 

Information 
Direccion General de Seguridad del 

Estado. See General Directorate of 

State Security 
Direccion Nacional Conjunto. See Joint 

National Directorate 
Directorate of Defense Information 

(Direccion de Informacion para la 

Defensa— DID), 218-19 
Directorate of Intelligence Affairs, 218 
Diriagen, 6-8 

DNC. See]o'mt National Directorate 
drought, 48, 107, 123 

earthquakes, xxvi, 56; casualties in, 102; 

of 1648, 9; of 1651, 9; of 1663, 9; of 

1931 , 56; of 1972, xxxi, 30, 56, 102 
East Germany. See German Democratic 

Republic 
EC. ^European Community 
ECLAC. See Economic Commission for 

Latin America and the Caribbean 
economic: adjustment program, 48; aus- 



terity program, 105, 114; diversifica- 
tion, 101-3; growth, 104-5; instability, 
xxxv; policy, colonial, 10; restructur- 
ing, 104; shock program, 114 

Economic Action Plan for Central Amer- 
ica (Plan de Accion Economico de 
Centroamerica— PAECA), 248 

Economic Commission, 157 

Economic Commission for Latin Amer- 
ica and the Caribbean (ECLAC) {see 
also Prebisch model), 239 

economic development: obstacles to, 
63; strategy for, 239-40 

economy: under Chamorro, 105-7, 114, 
119, 158-59; in civil war, xxxii; under 
colonial rule, 9; control of, 100; 
decline in, 34; informal, 68, 70, 122; 
mixed, 104, 107; under Sandinistas, 
104-5; under Somoza Garcia, xxx, 28; 
under Spanish rule, xxvi 

EDSN. See Army for the Defense of Nica- 
raguan Sovereignty 

education {see also schools), 74-76; gov- 
ernment spending on, 74; ideological 
training in, 75-76; postsecondary, 74, 
75; under Roman Catholic Church, 
84; under Sandinistas, xxxiv; text- 
books, 76 

Ejercito Defensor de la Soberania de 

Nicaragua. See Army for the Defense 

of Nicaraguan Sovereignty 
Ejercito Popular Sandinista. See Sandi- 

nista People's Army 
El Bluff: naval base, 213; port of, 135, 

136 

El Centroamericano, 182 

elections: of 1913, 20; of 1916, 20; of 
1920, 20; of 1924, 20; of 1928, 22; of 
1932, 22; of 1936, 24; of 1944, 27; of 
1950, 28; of 1957, 29; of 1967, 29; of 
1974, 32 

election of 1984, 45; campaign for, 46; 
outcome of, 46 

elections of 1990, xxxiii, 48, 49-50, 74, 
149; campaign of, xxxiii, 49; candi- 
dates in, 49, 160; supervision of, 49, 
144,160,207 

Electoral Law (1984), 45 

electric power, 137-39; in civil war, xxxiv; 
generation, 138-39 

elite class: under colonial rule, xxvi, 9, 
10; disputes among, 17; families of, 80- 



283 



Nicaragua: A Country Study 



81; life expectancy of, 61; as landown- 
ers, 67; opposition of, to Somoza 
Debayle, xxxi; religion of, 85; under 
Somoza Garcia, 28; women, 83-84 

El Limon mine, 131 

El Nuevo Diario, 182 

El Salvador: free-trade treaties of, 240, 
242; materiel sold to, 185; as member 
of Central American Common Mar- 
ket, 29, 239, 246-47; relations of, with 
Honduras, 246-47 

El Seminario, 182 

employment {see also work force), 67; 

conditions, 120; in industry, 125; of 

women, 83 
English language, xxxiv, 90 
Enterprise for the Americas Initiative, 

249 

environment, 132-34; impact of Contra 
war on, 132; pollution of, 128 

EPS. S«?Sandinista People's Army 

Equipe de Nicaragua, 134 

Esquipulas II. See Arias Plan 

Esso (Standard Oil), 138 

Estrada, Juan, 19; as president, 19; 
resigned, 19 

ethnic cleavage, xxxiv, 66 

ethnic groups {see also under individual 
groups): hierarchy among, 91; homo- 
geneity of, 65; precolonial, 3 

Europe, Eastern: advisers from, 204; mil- 
itary training by, 41, 200; petroleum 
imported from, 138; trade with, 116, 
117 

European Community (EC), 248; aid 
from, 188 

Europeans: geographic distribution of, 
66; as percentage of population, 65; 
social position of, 91 

exchange houses, 112, 113, 114 

exchange rate, 113 

executive branch {see also president): 
conflict of, with legislature, 153-56, 
161-62 

Export-Import Bank, 184 

exports {see also under individual prod- 
ucts): of agricultural products, xxvii, 
10, 17, 18, 26, 28, 67, 72, 107, 115, 116, 
126, 127; of commodities, 67; offish, 
131; income from, 67, 117; of live- 
stock, 28, 100; of minerals, 26; nontra- 
ditional, 115, 126; taxes on, 115 



external debt, 117, 118-19 

families, 78-82; and compadrazgo, 78, 81- 
82; disruptions of, 83; headed by 
women, 80, 83; and politics, 79; role 
of, 79-80; size of, 80; ties, 80-81 

FAO. See Broad Opposition Front 

FAO. See United Nations Food and Agri- 
culture Organization 

Farabundo Marti National Liberation 
Front (Frente Farabundo Marti de 
Liberacion Nacional— FMLN), 204 

FAS/DAA. See air force 

FDN. S#?Nicaraguan Democratic Force 

Federal Republic of Germany. See Ger- 
many 

Federacion de Trabajadores de Salud. 
See Federation of Health Workers 

Federation for Trade Union Action and 
Unity (Central de Accion y Unidad 
Sindical— CAUS), 122, 173 

Federation of Bank Workers, 113 

Federation of Health Workers (Fede- 
racion de Trabajadores de Salud — Fet- 
salud),172 

Fetsalud. See Federation of Health Work- 
ers 

Financial Corporation of Nicaragua 
(Corpo radon Financiera de Nicara- 
gua — Corfin), 113 

financial sector, 112-16 

FIR. See International Reconstruction 
Fund 

fishing, 131; exports, 131; precolonial, 5 
FMLN. See Farabundo Marti National 

Liberation Front 
FNT. See National Workers' Front 
FO. See Workers* Front 
Fondo Internacional de Reconstruccion. 

^International Reconstruction Fund 
Fonseca Amador, Jose Carlos, 32; killed, 

33 

food, 39; precolonial, 5; processing, 243; 
production, 126-27; shortages, 123, 
124 

foreign assistance, 39, 117-18; attempts 
to diversify, 182; from Colombia, 118, 
188; conditions on, 184; dependence 
on, 182, 183; from European Commu- 
nity, 188; frozen, xxxvi, 204; from Ger- 
many, 188; from International 
Monetary Fund, 118, 119, 188-89; loss 



284 



Index 



of, 107; from Mexico, 118, 188; prom- 
ises of, 182; from Spain, 118, 188; 
from the United States, 26, 117-18, 
183-84, 186, 204; from Venezuela, 118, 
188; from World Bank, 118, 119, 188, 
189 

foreign borrowing, 102 
foreign debt, 39; rescheduled, 39; servic- 
ing, 245 

foreign exchange, 126, 127, 245 
foreign investment, 103, 104; under 
Diaz, 20; loss of, 107; under Zelaya, 18 
foreign relations, 182-89 
forestry, 100, 131 

forests: in central highlands, 56; rain, 59, 

131, 134; regeneration of, 134 
FPN. See National Patriotic Front 
Framework Free Trade Agreement 

(1992), 249 
France: materiel from, 202, 212; pirates 

from, xxvi, 9, 90 
Frente Nacional de Trabajadores. See 

National Workers' Front 
Frente Amplio de Oposicion. See Broad 

Opposition Front 
Frente de Trabajadores Socialcristianos. 

See Social Christian Workers' Front 
Frente Farabundo Marti de Liberacion 

Nacional. See Farabundo Marti 

National Liberation Front 
Frente Nacional de Trabajadores. See 

National Workers' Front 
Frente Norte 3-80. See Northern Front 3- 

80 

Frente Obrero. See Workers' Front 

Frente Patriotico Nacional. See National 
Patriotic Front 

Frente Revolucionario de Obreros y 
Campesinos. See Revolutionary Front 
of Workers and Peasants 

Frente Sandinista de Liberacion Nacio- 
nal. See Sandinista National Liberation 
Front 

FROC. See Revolutionary Front of Work- 
ers and Peasants 

FSLN. See Sandinista National Liberation 
Front 

FTS. See Social Christian Workers' Front 
Fuerza Aerea Sandinista/Defensa Anti- 

Aerea. See air force 
Fuerza Democratica Nicaragiiense. See 

Nicaraguan Democratic Force 



Fundamental Statute of the Republic of 
Nicaragua (1979), xxxii, 40, 45 

G-3. See Group of Three 

Garifuna people, 90 

GC. See Center Group 

GDP. See gross domestic product 

General Confederation of Workers-Inde- 
pendent (Confederacion General de 
Trabajadores-Independiente — CGT- 
I), 122, 173 

General Directorate of State Security 
(Direccion General de Seguridad del 
Estado— DGSE), 218; human rights 
violations by, 219 

Generalized System of Preferences, 184 

General Treaty of Central American Eco- 
nomic Integration (Tratado General 
de Integracion Economica Cen- 
troamericana) (1960), 239, 241-42 

geographic regions, 55-59 

German Democratic Republic (East Ger- 
many): relations with, 203 

Germany: relations with, 18, 19 

GNP. See gross national product 

Godoy Reyes, Virgilio, 46, 175, 177; in 
elections of 1990, 49, 160, 161 

Golfo de Fonseca, 56 

Gonzalez Davila, Gil, 6-8; exploration by, 
6-8; rivalry of, with Hernandez, 8 

Gorostiaga, Xavier, 180 

government, local: under constitution of 
1987, 151-52; powers of, 152; regions 
of, 151-52 

Gracias (Honduras), 8 

Granada: agriculture in, xxvi; competi- 
tion of, with Leon, 10-11; conserva- 
tives in, 10-11, 103; destroyed, xxvi, 9, 
15; elite class in, 10, 103; founded, 8; 
population in, 62 

Great Depression, xxix 

gross domestic product (GDP), 74, 102, 
104; agriculture, 126, 127; construc- 
tion, 124; defense spending, 214; 
industry, 124; manufacturing, 245; per 
capita, xxxiv, 70; private sector, 68, 
108, 109; state enterprises, 110; tax 
revenues, 115 

gross national product (GNP): defense 
spending as percentage of, 214 

Group of Three (G-3), 249 

Group of Twelve. SeeLos Doce 

Grupo de Centre See Center Group 



285 



Nicaragua: A Country Study 



Guatemala: free-trade treaties of, 240, 
242; as member of Central American 
Common Market, 29, 239 

Guerrero Gutierrez, Lorenzo, 29 

Guido, Clemete, 162 

Habsburgs, 10 

Hassan Morales, Moises, 38, 164 

health care system, 76-78; access to, 
xxxiv, 77; National Guard control of, 
26; restructured, 77; under Sandinis- 
tas, xxxiv, 77; war damage to facilities 

health care professionals: protests by, 
177; training of, 77 

health problems: AIDS, 77; causes of 
death, 76; malnutrition, 73; war, 78 

Hernandez de Cordoba, Francisco, 8; 
rivalry of, with Gonzalez, 8 

Heroes and Martyrs-National Confedera- 
tion of Professional Associations (Con- 
federacion Nacional de Asociaciones 
Profesionales-Heroes y Martires — 
Conapro-Heroes y Martires) , 1 73 

Honduras: border dispute with, 196; 
free-trade treaties of, 240, 242; as 
member of Central American Com- 
mon Market, 29, 239, 246-47; relations 
of, with El Salvador, 246-47 

Huembes Trejos, Carlos, 173 

human rights, 219-20; abuses, 33, 34, 36, 
39-40,42,217, 218,219 

hunting, 5, 132 

Hurricane Joan, 48, 60, 105, 126, 131 
Hurtado Cabrera, Carlos, 171 

IDB. See Inter-American Development 
Bank 

IMET. See International Military Educa- 
tion and Training 
IME See International Monetary Fund 
immigration: control of, 26; precolonial, 

3 

imports, 116, 117 

income: distribution, 67, 72-73; per cap- 
ita, 70-72 

independence, xxvi-xxvii 

Independent Liberal Party (Partido Li- 
beral Independiente— PLI), 27, 161; 
in National Patriotic Front, 36; in 1967 
election, 29; in 1984 election, 46 

Independent Liberal Party of National 
Unity (Partido Liberal Independiente 



de Unidad Nacional— PLIUN), 159, 
164 

indigenous peoples, xxv; exterminated 
by disease, xxv, 6, 100; geographic dis- 
tribution of, 59, 66, 89; as percentage 
of population, 65-66; as slaves, 8; social 
position of, 91 

Indio-Mafz biological reserve, 134 

industrial development, 72, 115; incen- 
tives for, 243 

industrial growth, 245 

industrialization, 102; import-substitu- 
tion, 101-2, 124, 239, 240; policy, 245 

industrial production: in civil war, 36 

industry, 123-25; control of, by Somoza 
family, 26; decline in, 124; employ- 
ment in, 125; as percentage of gross 
domestic product, 124; under Sandi- 
nistas, 109 

inflation, 102, 114-15; attempts to 
reduce, 105, 114; under Sandinistas, 
105; under Somoza Debayle, 34, 36, 
102 

infrastructure: damaged in earthquakes, 
102; damaged in wars, 104; develop- 
ment of, xxvii, 134, 243; improvement 
of, 18 

Instituto de Recursos Naturales. SeeNica- 
raguan Institute for Natural Resources 
and Environment 

insurance services: nationalized, 108 

Integration Industries Convention (Re- 
gimen de Industrias de Integration — 
RII), 241, 242, 244, 246 

Intelsat. See International Telecommuni- 
cations Satellite Corporation 

Inter-American Development Bank 
(IDB), 112; loan from, 118, 119 

Inter-American Regional Organization 
of Workers, 173 

interest groups, 168-80 

internal revenue service: National Guard 
control of, 26 

internal security, 215-24; intelligence ser- 
vices, 218-19 

International Committee of the Red 
Cross, 220 

International Court of Justice: lawsuit, 

118, 185-86 
International Monetary Fund (IMF): 

economic restructuring under,106; 

loan from, 118, 119 



286 



Index 



International Reconstruction Fund 
(Fondo Internacional de Reconstruc- 
tion— FIR) , 39 

international relief: for earthquake of 
1972, 30; after Sandinista revolution, 
39 

International Support and Verification 
Commission, 207 

Internadonal Telecommunications Sat- 
ellite Corporation (Intelsat), 137 

Iran-Contra affair, xxxii, 47 

Irena. S«e Nicaraguan Institute for Natu- 
ral Resources and Environment 

Irregular Warfare Battalions (Batallones 
de Lucha Irregulares — BLIs), 206-7, 
211 

Israel: materiel from, 196, 202; training 

by, 202 
Italy: materiel from, 212 
Iturbide, Agustin de, 12 

Japan: relations with, 18, 19, 189 
Jarquin Anaya, Agustin: as president, 25 
Jehovah's Witnesses, 85 
Jerez, Maximo, 14; as president, 16 
Jeronimo. See D'Escoto Brockman, 
Miguel 

John Paul II, 84; mass by, 44-45 

Joint National Directorate (Direction 

National Conjunto — DNC), 40 
judiciary, 150-51; under constitution of 

1987, 150-51; efforts to depoliticize, 

223 

Korea, Republic of (South Korea): rela- 
tions with, 189 
Korean War (1950-53), 101 
Kupia-Kumi Pact (1972), 30 

labor. See employment; work force 
labor, forced, xxv, 100 
Labor Code (1945), 120 
labor movement, 30 

labor unions, 27-28, 120-22, 171-77; free- 
dom to organize, 171-72; membership 
in, 120-22, 173; opposition of, to San- 
dinistas, 109; opposition of, to Somoza 
Debayle, xxxi 

labor unrest, 123 

Lacayo, Cristiana Chamorro de, 181 
Lacayo Oyanguren, Antonio, xxxvi, 50, 
145, 158, 181 



Lacayo Sacasa, Benjamin, 27 

Lago de Managua, 56, 135 

Lago de Nicaragua, 56, 135 

Laguna de Perlas, 59, 90 

Laguna Rayo, Tomas (Commander 
Dimas) , 1 70 

land, 67; area, 55; claims to, 170, 174; 
decrees, 111 

landowners: compensation for, 111; in 
Leon, xxvi; opposition of, to fiscal 
reform, 245 

land ownership, 110-12 

land reform, 68-69, 110, 111, 156; confis- 
cation of Somoza property in, 39, 68, 
69,104,107,110 

land tenure, 69 

Lanica. See Nicaraguan Airlines 

La Nicaragiiense, 182 

LaPrensa, 181; censored, 34, 45, 47; oppo- 
sition of, to Sandinistas, 45; opposition 
of, to Somoza Debayle, xxxi, 30, 34 

La Salud dairy: Somoza family control 
of, 26 

Latin American Center for Demography 
(Centro Latino-Americano de De- 
mografia — Celade), 60-61 

Latin American Free Trade Area, 239 

law enforcement, 21 6-1 8; breakdown of, 
216; of morality ordinances, 217 

Law of Military Organization of the San- 
dinista Popular Army (1990), 209 

Law of National Emergency (1982), 221, 
222 

Law on Municipalities (1988), 151, 152 

legislature: conflict of, with executive, 
153-56, 161-62; under constitution of 
1987, 149-50 

Leon: competition of, with Granada, 10- 
11; elite class in, 10, 103; founded, 8; 
landowners in, xxvi; liberals in, 10-11, 
103; population in, 62 

Liberal Constitutionalist Party (Partido 
Liberal Constitucionalista — PLC), 161 

Liberal International, 160 

Liberal Nationalist Party (Partido Li- 
beral Nacionalista — PLN): estab- 
lished, 25; Somoza family control of, 
25 

Liberal Party (Partido Liberal— PL), 24, 
161 

liberals {see also conservative-liberal con- 
flict), 103; anticlerical policy of, 10; 



287 



Nicaragua: A Country Study 



cooperation of, with conservatives, 1 6, 

194-95; free-trade policy of, xxvi 
liberation theology, 43 
Libya: materiel from, 212 
Lfneas Aereas de Nicaragua. SeeNicara- 

guan Airlines 
literacy, 74, 76; under Sandinistas, xxxiv, 

74-75, 76 

livestock, 101, 130-31; cattle, xxvi, 130- 

31; introduction of, xxvi 
living standards, 72, 73 
Lloyds Bank, 112 
Lopez Arellano, Oswaldo, 247 
Lopez Perez, Rigoberto, 28 
Los Doce (Group of Twelve), 33-34, 35; 

in Broad Opposition Front, 35; in 

National Patriotic Front, 36 
lower class: families of, 82; occupations 

of, 67 

Luisa Amanda Espinoza Nicaraguan 
Women's Association (Asociacion de 
Mujeres Nicaragiienses Luisa Amanda 
Espinoza— AMNLAE) , 41 

Madriz, Jose: as president, 19; resigned, 
19 

Managua, 16; air force base, 212; 
destroyed by earthquakes, xxxi, 56; 
population in, 62, 152; poverty in, 72 

Managua Declaration (1990), 169 

manufacturing: in civil war, xxxiii, 124; 
as percentage of gross domestic prod- 
uct, 245 

Mao Zedong, 33 

Marina de Guerra Sandinista. See navy 
marriage, 80 

Martinez, Tomas: as president, 16 

Marxist-Leninist Popular Action Move- 
ment: in election of 1984, 46 

Masaya: population in, 62 

mass organizations, xxxii, 41 

Matagalpa: population in, 62 

materiel: air force, 212; army, 211; from 
Czechoslovakia, 212; to El Salvador, 
185; from France, 202, 212; from 
Israel, 196, 202; from Italy, 212; from 
Libya, 212; militia, 200; National 
Guard, 196; navy, 213; from Panama, 
36; to Peru, 214; sales of, 214; for San- 
dinistas, 36; from the Soviet Union, 
193, 199-200, 203, 207, 211, 212, 213; 
from Sweden, 196; from Venezuela, 36 



Mayoraga, Francisco, 107 
Mayorga, Silvio, 32 

MDN. See Nicaraguan Democratic Move- 
ment 

media, 180-82; censorship of, 32; parti- 
sanship in, 180 
Mena, Luis, 19-20 

Mercantile Bank (Banco Mercantil), 112 
merchants, 9 

mestizos, xxxiv, 6, 90, 91; geographic dis- 
tribution of, 66, 90, 91; as percentage 
of population, 65; social position of, 
91 

Mexican Empire, xxvi; independence 

from, xxvii, 12 
Mexico: in Group of Three, 249; loan 

from, 118; petroleum imported from, 

138,188 
MGS. See navy 

middle class: as landowners, 67; opposi- 
tion of, to Somoza Debayle, xxxi; per- 
centage of population in, 67; religion 
of, 85; women, 83-84 

military: assistance, 18, 22, 26, 195, 196; 
conscription, 193, 199, 200, 206, 209; 
cooperation, 214; service, 41 

Milicia Popular Sandinista. See Sandi- 
nista People's Militia 

mines: forced labor in, xxv, 100; nation- 
alized, 108, 131 

mining, 131-32; production, 132 

Ministry of Agrarian Reform, 39 

Ministry of Education, 75 

Ministry of Government, 21 7 

Ministry of Health, 77, 78 

Ministry of Interior, 21 6 

Ministry of Labor, 120, 122 

Miskito people, 6, 9-10, 90; forced relo- 
cation of, 42; geographic distribution 
of, 66, 90; language of, 91; neglect of, 
42; opposition of, to Sandinistas, 42; 
religion of, 86, 88; revolt by, against 
Sandinista administration, 93-94; 
social position of, 91 

missionaries, 86 

Misurasata, 205 

Molina Palacios, Eduardo, 162 

Moncadajose Maria, 21, 22, 25; as presi- 
dent, 22, 24 

Montelimar air force base, 212 

Moran Flores, Jose Angel (Commander 
Indomable), 171 



288 



Index 



Moravian Church, 85, 86, 90; political 
orientations of, 88 

Mosquito Coast {see also Costa de Mos- 
quitos), 12 

Movimiento de Accion Popular — Mar- 
xista-Leninista. See Marxist-Leninist- 
Popular Action Movement 

Movimiento de Unidad Revolucionaria. 
See Revolutionary Unity Movement 

Movimiento del Pueblo Unido. See 
United People's Movement 

Movimiento Democratico Nica- 
ragiiense. See Nicaraguan Democratic 
Movement 

MPS. See Sandinista People's Militia 

MPU. See United People's Movement 

Multilateral Treaty on Free Trade and 
Central American Economic Integra- 
tion (Tratado Multilateral de Libre 
Comercio e Integracion Economica 
Centroamericana) , 241 

Municipal Council (Consejo Municipal), 
151-52; members of, 151 

MUR. See Revolutionary Unity Move- 
ment 

NAFTA. See North American Free Trade 

Agreement 
National Action Party (Partido de 

Accion Nacional — PAN), 161 
National Assembly, xxxv, xxxvii; under 

constitution of 1987, 149-50; members 

of, 149; military takeover of, xxxvi; 

number of seats in, 45-46; powers of, 

149-50 

National Association of Nicaraguan 
Teachers (Asociacion Nacional de 
Educadores de Nicaragua — ANDEN) , 
172 

National Autonomous University of Nic- 
aragua (Universidad Nacional 
Autonoma de Nicaragua — UNAN), 
32, 180 

National Conservative Party (Partido 

Conservador Nacional — PCN), 161 
National Conservative Unity Party 

(Partido de Unidad Nacional Conser- 

vadora— PUNC),28 
National Constabulary, 195 
National Development Bank (Banco 

Nacional de Desarrollo— BND), 112, 

113 



National Employees Union (Union 
Nacional de Empleados — UNE), 172, 
174 

National Financial System (Sistema Fi- 
nanciero Nacional — SFN), 113 

National Guard, 21, 24, 195-97; abolished, 
xxxii; amnesty for, 48; campaign of, 
against Sandino's supporters, 24, 195; 
campaign of, against Sandinistas, 32- 
33; command of, 22-24, 196; control by, 
of infrastructure, 26, 196; corruption 
in, 197; development of, 22, 24, 195; 
directors of, xxix, xxx, 27, 28, 29-30, 
196; flight of, 38; foreign influences 
on, 202-5; formed, xxviii, 20; human 
rights abuses by, 34, 36; looting of 
Managua by, xxxi, 30; materiel of, 196; 
military assistance to, 202-5; missions 
of, 196; number of personnel in, 195, 
196; organization of, 195, 196; punish- 
ment of, 38; repression by, 197; support 
of, for Somoza family, 25, 195-97; trials 
of members of, 221-22 

nationalization: under Sandinistas, 107- 
8; of Somoza property, 39, 68, 69, 104 

National Minimum Wage Commission, 
120 

National Opposition Union (Union 
Nacional Opositora — UNO), xxxiii, 
105, 159-62; cooperation of, with San- 
dinistas, xxxvi; in election of 1967, 29; 
in election of 1990, 49; end of support 
for Chamorro, xxxvi-xxxvii, 154; ori- 
gins of, 159; schism in, xxxv, 160; tran- 
sition to, 50, 143, 145-46 

National Patriotic Front (Frente 
Patriotico Nacional — FPN) , 36; mem- 
bers of, 36 

National Penitentiary Commission, 220 

National Reconciliation Commission, 48 

National Teachers' Confederation of 
Nicaragua (Confederacion Nacional 
de Maestros Nicaragiienses — 
CNMN),173 

National Union of Farmers and Cattle- 
men (Union Nacional de Agricul- 
tores y Ganaderos — UNAG), 41, 177- 
79; founded, 178; role of, 178 

National War (1856-57), 16 

National Workers' Front (Frente Nacio- 
nal de Trabajadores— FNT), 122, 166, 
172,175,211 



289 



Nicaragua: A Country Study 



navy, 209, 212-13; bases, 213; com- 
mander of, 213; materiel, 213; mer- 
chant marine, 196; mission of, 212-13; 
number of personnel in, 213; vessels 
of, 212 

Netherlands: pirates from, xxvi, 9, 90 

Nicarao. See Nicaragua 

Nicaragua (chief) (Nicarao), 5, 6 

Nicaraguan Airlines (Lineas Aereas de 
Nicaragua — Lanica), 196; Somoza 
family control of, xxx, 26, 103 

Nicaraguan Bank of Industry and Com- 
merce (Banco Nicaraguense de Indus- 
tria y Comercio — Banic), 103, 112 

Nicaraguan Coast Indian Unity, 43 

Nicaraguan Democratic Coordinating 
Group (Coordinadora Democratica 
Nicaraguense — CDN), 159 

Nicaraguan Democratic Force (Fuerza 
Democratica Nicaraguense — FDN), 
205-6, 207 

Nicaraguan Democratic Movement 
(Movimiento Democratico Nica- 
raguense — MDN), 35, 161; in Broad 
Opposition Front, 35; formed, 35 

Nicaraguan Institute for Natural 
Resources and Environment (Instituto 
de Recursos Naturales — Irena), 132, 
134 

Nicaraguan Resistance. SeeContras 
Nicaraguan Social Christian Party 
(Partido Social Cristiano Nica- 
raguense— PSCN), 122, 161, 164 
Nicaraguan Socialist Party (Partido 
Socialista Nicaraguense — PSN), 27, 
173 

Nicaraguan Social Security Institute, 77 
Nicoya (chief), 6 

Niquirano people, 5; resistance by, to 

Spanish invaders, 6-8 
North American Free Trade Agreement 

(NAFTA) ,248 
Northern Front 3-80 (Frente Norte 3- 

80), 215, 216 
Nunez Tellez, Carlos, 165 
Nunez Tellez, Rene, 167 

OAS. See Organization of American 
States 

Obando y Bravo, Miguel, 32, 35, 48, 88, 
179; opposition of, to Sandinistas, 43; 
opposition of, to Somoza Debayle, 30 



Odeca. See Organization of Central 

American States 
Opposition Bloc of the South, 43 
Organic Law of Tribunals: reforms to, 

150 

Organizacion de Estados Centroameri- 
canos. See Organization of Central 
American States 

Organization of American States (OAS), 
36, 171, 196; election supervised by, 
49,144,160,207 

Organization of Central American States 
(Organizacion de Estados Cen- 
troamericanos — Odeca) , 240 

Ortega Saavedra, Daniel Jose, xxxii, 33, 
38, 40, 167; in election of 1984, 46; in 
election of 1990, 49; income from 
Piriata, 156; as president, 149 

Ortega Saavedra, Humberto, 33, 50, 145, 
165, 167; attacks on, xxxvi; as head of 
armed forces, xxxii, xxxvii, 143, 146, 
169, 193, 199, 207-9 

Overseas Private Investment Corpora- 
tion, 184 

Pacific lowlands, 100; cultures in, xxxiv, 

4-5, 55; population in, 63, 65, 66; 

topography of, 55-56 
Pacific Ocean, 56 
Pact of Espino Negro (1927), 21 
PAECA. See Economic Action Plan for 

Central America 
PAN. See National Action Party 
Panama: military assistance from, 202, 

203, 216; military training by, 216; 

transit across, 16 
Panama Canal, 17, 56 
Panamanian National Guard, 203, 216 
Pan American Highway, 135 
PANC. See Conservative National Action 

Party 

Partido Comunista de Nicaragua. See 
Communist Party of Nicaragua 

Partido Conservador. See Conservative 
Party 

Partido Conservador Democrata. See 
Democratic Conservative Party 

Partido Conservador Nacionalista. See 
National Conservative Party 

Partido Conservador Nicaraguense. See 
Nicaraguan Conservative Party 

Partido Cristiano Social Nicaraguense. 



290 



Index 



S#?Nicaraguan Social Christian Party 
Partido de Accion Nacional. See National 

Action Party 
Partido de Accion Nacional Conserva- 

dora. ^Conservative National Action 

Party 

Partido Democrata de Confianza Nacio- 
nal. See Democratic Party of National 
Confidence 

Partido de Unidad Nacional Conserva- 
dora. See National Conservative Unity 
Party 

Partido Integracionalista Centroameri- 
cano. See Central American Integra- 
tionist Party 

Partido Liberal. See Liberal Party 

Partido Liberal Constitucionalista. See 
Liberal Constitutionalist Party 

Partido Liberal Independiente. ^Inde- 
pendent Liberal Party 

Partido Liberal Independiente de 
Unidad Nacional. See Independent 
Liberal Party of National Unity 

Partido Liberal Nacionalista. See Liberal 
Nationalist Party 

Partido Marxista-Leninista de Nicara- 
gua. SeeNicaraguan Marxist-Leninist 
Party 

Partido Popular Social Cristiano. See 
Popular Social Christian Party 

Partido Revolucionario de los Trabaja- 
dores. See Workers' Revolutionary 
Party 

Partido Social Cristiano. See Christian 

Social Party 
Partido Social Cristiano Nicaragiiense. 

S^Nicaraguan Social Christian Party 
Partido Social Democrata. See Social 

Democratic Party 
Partido Socialista Nicaragiiense. SeeNica- 

raguan Socialist Part) 7 
Partido Unionista Centroamericano. See 

Central American Unionist Party 
Pastora Gomez, Eden (Commander 

Zero), 35, 42-43,206 
Patriotic Military Service. See military 

conscription 
PCN. See National Conservative Party 
Pcden. See Communist Party of Nicara- 
gua 

PDCN. See Democratic Party of National 
Confidence 



peasants: employment of, 67-68, 83; land 

for, 69, 73 
peasants' associations, xxxii 
Pedrarias. See Arias Davila, Pedro 
peninsular es. resented by Creoles, 11 
People's Anti-Somoza Tribunals (Tribu- 

nales Populares Anti-Somocistas — 

TPAs),222 
People's Bank (Banco Popular), 112, 113 
Permanent Congress of Workers (Con- 

greso Permanente de Trabajadores — 

CPT), 173, 177 
Permanent Human Rights Commission, 

220 

Peru: materiel sales to, 214 
petroleum: imports of, 116, 117, 138, 
188 

Pinata, 69-70, 111, 112, 156-57, 165; 
demands to abolish, xxxvi, 157; inven- 
tory of, 156 

Pipil language, 5 

piracy, xxvi, 9, 90 

Pizarro, Francisco, 8 

PL. See Liberal Party 

Plan de Accion Economico de Cen- 

troamerica. See Economic Action Plan 

for Central America 
Plan of 100 Days, 107 
PLC. See Liberal Constitutionalist Party 
PLI. ^Independent Liberal Party 
PLIUN. ^Independent Liberal Party of 

National Unity 
PLN. See Liberal Nationalist Party 
PMLN. See Nicaraguan Marxist-Leninist 

Party 

police, 194, 195, 201, 211, 216-18; courts, 
223; powers of, 222-23; reduction of, 
153; Sandinista control of, xxxv, 153, 
217; secret, 218-19; training of, 216, 
217; women as, 217 

Police Functions Law, 223 

political instability, xxxv 

political parties. See under individual par- 
ties 

Political Parties Law (1983), 45 
political violence, 177, 215, 219-20 
Popular Church of Liberation Theology, 
43, 88 

Popular Education Cooperatives, 75 
Popular Social Christian Party (Partido 
Popular Social Cristiano— PPSC) , 159, 
161, 164; in National Patriotic Front, 



291 



Nicaragua: A Country Study 



36 

population, 61; age distribution in, 61; 
density, 65; ethnic distribution in, 65- 
66; geographic distribution of, xxv, 64- 
65, 90; of Granada, 62; indigenous, 
xxv, 6; of Leon, 62; of Managua, 62; of 
Masaya, 62; of Matagalpa, 62; percent- 
age of, in poverty, xxxiv, 72; percent- 
age of Protestants in, 86; rural, 62; 
urban, 60, 62-63, 72 

population statistics: birth rate, 61, 62, 
82; fertility rate, 61; growth rate, 60, 
61, 63; infant mortality rate, 61, 72, 73, 
78; life expectancy, 61; mortality rate, 
61 

ports, 135-36, 196; construction of, xxvii, 
18; Somoza family control of, xxx, 26, 
103 

postal service: National Guard control 

of, 26 

poverty, 73, 123, 134, 179; percentage of 
population in, xxxiv, 72; in rural areas, 
72; in urban areas, 72 

PPSG. See Popular Social Christian Party 

Prebisch, Raul, 239 

Prebisch model, 239, 241, 244; obstacles 
to, 244-45 

presidency: abolished, 40 

president (see also executive branch): 
powers of, 147-49; term of, 149 

press (see also journalists; media; newspa- 
pers): censorship of, 28, 32, 34, 45, 47 

price controls, 105 

Prison Directorate, 220 

prisoners, 219, 220-21; number of, 220; 
political, 220 

prisons, 220-21; conditions in, 220-21 

private sector, 108-10; opposition of, to 
Sandinistas, 109; as percentage of 
gross domestic product, 68, 108, 109 

privatization, 70, 108-10, 110; criticized, 
176-77 

producers' groups, 177-79 
Proletarian faction (Sandinistas), 33 
Proletarios. See Proletarian faction 
Prolonged Popular War faction (Sandi- 
nistas), 33 

property rights (see also Piriata), 156-59; 

dispute over, 156-59 
Protestantism (see also under individual 

denominations), 85-86; percentage of 

followers in population, 86 



Protestants: geographic distribution of, 
xxxiv, 90; growth of, 88; monitored by 
Sandinistas, 88-89; political orienta- 
tions of, 88 

Protocol on Procedures for the Transfer 
of Presidential Powers, 145-46, 153; 
criticism of, 146-47 

PRT. See Workers' Revolutionary Party 

PS. See Social Conservative Party 

PSC. See Christian Social Party 

PSCN. SeeNicaraguan Social Christian 
Party 

PSD. See Social Democratic Party 
PSN. SeeNicaraguan Socialist Party 
public sector, 152-53; appointments in, 

152; reduction of, 116, 153; size of, 

153 

PUCA. See Central American Unionist 
Party 

Puerto Cabezas, 90, 135, 136; air force 

base, 212; naval base, 213 
Puerto Sandino, 135; air force base, 212 
PUNC. See National Conservative Unity 

Party 

Puntarenas Pact (1979), 36 

radio, 137; National Guard control of, 

26, 196; as news source, 181 
Radio Corporacion, 177, 181 
Radio Ya, 181 

railroads, 135; construction of, xxvii, 17, 
18, 134; National Guard control of, 
26; Somoza Garria's control of, xxx; 
United States control of, xxviii 

Rama: port of, 1 35 

Rama people: geographic distribution 
of, 66, 90; religion of, 86; social posi- 
tion of, 91 

Ramirez Benevente, Erick, 164 

Ramirez Mercado, Sergio, 33, 38, 167, 
167, 182; in elections of 1990, 49 

Reagan administration: support by, for 
Contras, xxxii, 42 

Real Estate Bank (Banco Inmobilario — 
Bin), 112, 113 

Recompas, 171, 193, 194, 216 

Recontras, xxxv, 168-71, 193, 194, 215; 
demands of, 171; fighting by, 169-71; 
personnel strength of, 170 

Reform Law of Penal procedures (1991), 
223-24 

Regimen de Industrias de Integracion. 



292 



Index 



See Integration Industries Convention 
Regional Office for Central America and 

Panama (ROCAP), 244 
Regional Telecommunications Commis- 
sion (Comision Tecnica de las Teleco- 
municaciones de Centroamerica — 
Comtelca), 243 
religion {see also under individual denomi- 
nations) , 84-89; distribution of, in pop- 
ulation, 86; practices of, 85; under 
Zelaya, 84 

Revolutionary Front of Workers and 
Peasants (Frente Revolucionario de 
Obrerosy Campesinos — FROC), 216 

Revolutionary Junta (see also Council of 
State) , 36-38; assumption of power by, 
xxxi, 38; members of, 38; program of, 
xxxi, 36-38 

Revolutionary Unity Movement (Movi- 
miento de Unidad Revolucionaria — 
MUR), 150, 164 

Revolutionary Vigilance Patrols, 202, 217 

Revueltos, xxxv, 171 

Richardson, Elliott, 145 

RII. See Integration Industries Conven- 
tion 

Rio Coco, 59 

Rio de Janeiro Treaty of Mutual Defense 

(1947), 196 
Rio Escondido, 59 
Rio Grande de Matagalpa, 59 
Rio Prinzapolka, 59 
Rio San Juan, 56, 59 
Rio Tipitapa, 56 
Rivas: elite class in, 10 
Rivas, Patricio, 14-15; as president, 16 
Rivera Bryan, Brooklyn, 205 
rivers, 56, 135 

roads, 135, 244; construction of, xxvii, 
17, 18, 134 

Robelo, Rodolfo, 164 

Robelo Callejas, Alfonso, 35, 38, 40 

ROCAP. See Regional Office for Central 
America and Panama 

Roman Catholic Church. See Catholic 
Church, Roman 

Roman Reyes, Victor: as president, 27 

Roosevelt, Theodore, 17 

rural areas: birth rate in, 62; employ- 
ment in, 67, 83; health care in, xxxiv; 
poverty in, 72; women in, 83 

Russia (see also Soviet Union): trade with, 



117 

Sacasa, Juan Bautista: as president, xxix, 
22, 24; resignation of, xxix, 21, 25; as 
vice president, 20 

Sacasa, Ramiro, 30 

Sacasa, Roberto, 17 

Sandinista administration, 39-50, 104-5; 
amnesty granted by, to opposition, 48; 
budget deficit under, 115; consolida- 
tion of power by, xxxii; defense spend- 
ing by, 43, 73, 214; economy under, 
104-5; education under, 74-76; govern- 
ment structures abolished by, xxxii, 
40; goals of, 39-40, 55, 68, 73, 107; 
land reform under, 39, 68, 69, 104, 
107, 110; literacy under, 74-75; nation- 
alization under, 107; negotiations of, 
with Contras, xxxiii, 47, 48-49; opposi- 
tion to, 42-45, 109, 159; religious 
groups under, 88; social programs of, 
xxxiv; state of emergency by, 43, 45; 
support for, 106; transition from, 50, 
143, 145-46 
Sandinista Air Force/Air Defense Force 
(Fuerza Aerea Sandinista/Defensa 
Anti-Aerea — FAS/DAA) . See air force 
Sandinista Assembly (1990), 165-66 
Sandinista Defense Committees 
(Comites de Defensa Sandinista — 
CDSs),41,202, 217 
Sandinista Ethics Commission, 166 
Sandinista National Directorate, 164, 
166-67 

Sandinista National Liberation Front 
(Frente Sandinista de Liberacion 
Nacional— FSLN), 3, 164-68; armed 
forces controlled by, xxxv, 146, 153, 
193; campaign against, by Somoza 
Debayle, 32-33; cooperation of, with 
UNO, xxxvi; democratization of, 166, 
167; in election of 1984, 46; factions 
of, 33, 165, 167-69, 205; formed, xxxi, 
32, 197; future of, 165; guerrilla oper- 
ations of, 32, 35 198; human rights vio- 
lations by, 219; as loyal opposition, 
164-68; materiel of, 36, 202; members 
of, 166; military assistance to, 203-4; 
number of personnel in, 198; opposi- 
tion of, to Somoza Debayle, xxxi, 32- 
33; police controlled by, xxxv, 153, 
217; reunification of, 36; rule from 



293 



Nicaragua: A Country Study 



below, 174, 175; support for, xxxi- 
xxxii, 33-34, 88; training of, 198, 202; 
women in, 201 

Sandinista Navy (Marina de Guerra San- 
dinista — MGS). Seenwy 

Sandinista People's Army (Ejercito Po- 
pular Sandinista — EPS) {see also 
armed forces), xxxii, 41, 171, 198-200; 
command of, 199; materiel for, 36, 
199-200; number of troops in, 41, 199, 
206; organization of, 199; reduction in 
force, 48, 193; training of, 41, 199; vol- 
unteers for, 199; women in, 201-2 

Sandinista People's Militia (Milicia Po- 
pular Sandinista— MPS), 200-202, 206; 
disbanded, 193, 209; established, 200; 
materiel of, 200; missions of, 200-201; 
organization of, 200 

Sandinista Police (Policia Sandinista — 
PS). See police 

Sandinista Revolution, xxxi, 36-38, 196, 
197-98; in Caribbean lowlands, 92-94; 
casualties in, xxxi, 39, 73, 104; impact 
of, 103-4, 124, 204; legacy of, 70, 103-4 

Sandinista Workers' Federation (Central 
Sandinista de Trabajadores — CST), 
41,122,172 

Sandino, Au gusto Cesar, xxviii; assassi- 
nated, xxix, 24; background of, 21-22; 
guerrilla warfare by, xxviii, 22, 24, 195; 
negotiations of, with Sacasa, 24 

San Jose Accord, 1 38 

San Juan del Norte, 12 

San Juan del Sur naval base, 213 

Schick Gutierrez, Rene, 29 

schools: attendance in, xxxiv, 72, 74, 75, 
76; construction of, xxvii, 18 

Secretana Permanente del Tratado 
General de Integracion Economica 
Gentroamericana (SIECA), 242 

Semana Comica, 182 

service sector, 1 34-39 

Seventh Day Adventists, 85 

SEN. See National Financial System 

shantytowns, 61-62 

shipping: Somoza family control of, xxx, 
26, 103 

SICA. See System of Central American 

Integration 
SIECA. See Secretana Permanente de 

Integracion Economica Centroameri- 

cana 



Simon Bolivar Brigade, 202 

Sistema de Integracion Centroameri- 

cana.Se* System of Central American 

Integration 
Sistema Financiero Nacional. See 

National Financial System 
Siuna mine, 131 
slavery, 15 
slaves, 8, 90 

Sobalvarro Garcia, Oscar Manuel (Com- 
mander Ruben), 169 

Soccer War (1969), 102, 240 

social conditions, 55, 70-74 

social instability, xxxv 

social programs: deterioration of, in civil 
war, xxxii; under Sandinistas, xxxiv; 
spending on, 73 

Solorzano, Carlos: ousted, 21; as presi- 
dent, 20 

Somoza family, 3; control of armed 
forces by, 25; control of economy by, 
68, 103; control of government by, 25; 
control of industry by, 26; control of 
Liberal Party by, 26; control of trans- 
portation by, 26, 103, 134; property of, 
nationalized, 39, 68, 69, 107, 110; sup- 
port for, by National Guard, 25, 195- 
97; wealth of, 103 

Somoza Debayle, Anastasio (Tachito): 
alienation of supporters, xxxi; assassi- 
nated, 38; as director of National 
Guard, xxx, 28, 29-30, 197; economy 
under, 34; embezzlement by, xxxi, 30; 
exiled, xxxi, 38, 198; opposition to, 

xxx, xxxi; as president, xxx, 29-30, 32, 
197; wealth of, 30 

Somoza Debayle (Anastasio) administra- 
tion, 29-30; budget deficit under, 115; 
campaign of, against Sandinistas, 32- 
33, 36-38; and Caribbean lowlands, 92; 
defense spending under, 214; econ- 
omy under, 36; opposition to, xxx- 

xxxi, 30, 33, 34-35, 36, 103; repression 
under, xxx, 32; state of siege under, 33 

Somoza Debayle, Luis: death of, xxx; as 
director of National Guard, xxx; 
opposition to, xxx; as president, xxx, 
28, 29, 197; repression under, 28; sup- 
port for, 29 

Somoza Garcia, Anastasio (Tacho), 
xxviii, 22; assassination of, xxx, 25, 28, 
197; background of, 24; consolidation 



294 



Index 



of power by, xxix, 24-25; control of 
industries by, xxx; as director of 
National Guard, xxix, 24, 27, 196; 
embezzlement by, xxx; opposition to, 
xxx; as president, xxix, 25-32; wealth 
of, 26 

Somoza Garcia administration, xxix- 
xxx, 25-32; nepotism in, 25-26; opposi- 
tion to, xxix, 25, 26-27, 103; origins of, 
25; repression by, 26; support for, 25 

Southern Front, 1 68 

South Korea. See Korea, Republic of 

Soviet Union (see also Russia): advisers 
from, 204; aid from, 3; loans from, 
119; materiel from, 193, 199-200, 203, 
207, 211, 212, 213; military training 
by, 41; petroleum imported from, 138; 
relations with, 188, 203; trade with, 
116 

Spain: claim of, to Caribbean coast, 10; 

loan from, 118 
Spanish conquest, 6-8, 84; resistance to, 

6-8 

Spanish language, xxxiv, 91 
Spanish rule, xxvi, 8-11; economy under, 
xxvi 

Special Foreign Currencies Fund, 248 
Squier, Ephraim George, 12 
Standard Oil. S<#Esso 
state of emergency (1985), 221 
state-owned enterprises: as percentage of 

gross domestic product, 110 
Statute on the Rights and Guarantees of 

Nicaraguans, 221 
Stimson, Henry L., 21 
strikes, 107, 153, 169, 172, 173-74; cost 

of, 175; general, of 1978, 34, 174 
students: opposition of, to Somoza 

Debayle, xxxi; protests by, 177 
subsidies: for coffee growers, 1 00 
Subsidy Law (1879), 100 
Subsidy Law (1889), 100 
sugar, 101, 130, 183 

Sumu people, 6; geographic distribution 
of, 66, 90; religion of, 86; social posi- 
tion of, 91 

Superior Council of Private Enterprise 
(Consejo Superior de la Empresa Pri- 
vada— Cosep), 108-9, 112, 159, 177-79; 
publications of, 182; role of, 178 

Supreme Court, 150, 223; members of, 
150 



Supreme Electoral Council, 46 

Sweden: materiel from, 196 

System of Central American Integration 

(Sistema de Integracion Centroameri- 

cana— SICA),248 

Tablada Zelaya, Gustavo: as president of 

National Assembly, xxxvii 
Tachito. See Somoza Debayle, Anastasio 
Tacho. See Somoza Garcia, Anastasio 
Taiwan. See China, Republic of 
tariffs. See customs duties 
taxes, 101; export, 115; local, 152 
tax: reform, 115; revenues, 115 
Tefel, Reinaldo Antonio: as vice presi- 
dent of National Assembly, xxxvii 
telecommunications, 136-37; construc- 
tion of, 17, 134; National Guard con- 
trol of, 26, 196; war damage to, xxxiii- 
xxxiv, 104 
telephones, 137 
television, 137 

Third Way faction (Sandinistas), 33 
'Thirty Years," 17 
Toncontm Accord (1990), 168 
topography, xxv, 55-59 
TPAs. See People's Anti-Somoza Tribu- 
nals 

trade {see also balance of trade; exports; 
imports), 116-17; in Central America, 
186-87, 239-49; deficit, 246; disruption 
of, 117; embargo, xxxii, 47, 74, 105, 
109, 114, 116, 117, 131, 183; impact of 
CACM on, 242-43; policies, xxvi; 
restrictions, xxvi 

trading partners, 116, 117 

Transitional Multilateral Free Trade 
Agreement, 248 

transportation, 134, 135-36; national- 
ized, 108; United States control of, 
xxviii; war damage to, xxxiii-xxxiv, 104 

Tratado General de Integracion 
Economica Centroamericana. See 
General Treaty of Central American 
Economic Integration 

Tratado Multilateral de Libre Comercio 
e Integracion Economica Cen- 
troamericana. See Multilateral Treaty 
on Free Trade and Central American 
Economic Integration 

Tratado Tripartite See Tripartite Treaty 

treaties, 12, 240 



295 



Nicaragua: A Country Study 



Treaty of Friendship, Commerce, and 

Navigation (1956), 186 
Tribunales Populares Anti-Somocistas. 

See People's Anti-Somoza Tribunals 
Tripartite Treaty (Tratado Tripartito) , 

242 

Truman, Harry S., 27 

UCA. See Central American University 
Udel. See Democratic Liberation Union 
UNAG. See National Union of Farmers 

and Cattlemen 
UNAN. See National Autonomous Uni- 
versity of Nicaragua 
underemployment, 73, 122, 154 
UNE. See National Employees Union 
unemployment, 122, 154; under Sandi- 
nistas, 48, 73; under Somoza Debayle, 
34, 36 

UNICEF. See United Nations Children's 
Fund 

Union Democratica de Liberacion. See 

Democratic Liberation Union 
Union Nacional de Agricultores y Gana- 

deros. See National Union of Farmers 

and Cattlemen 
Union Nacional de Empleados. See 

National Employees Union 
Union Nacional Opositora. See National 

Opposition Union 
Union of Nicaraguan Journalists (Union 

de Periodistas de Nicaragua — UPN) , 

172-73 

United Nations, 60; election supervised 
by, 49, 144, 160, 207; resolution con- 
demning Somoza Debayle, 36 

United Nations Central American 
Observer Group, 169 

United Nations Children's Fund 
(UNICEF), 77 

United Nicaraguan Opposition, 43 

United People's Movement (Movimiento 
del Pueblo Unido— MPU), 35 

United Provinces of Central America: 
independence from, xxvii, 12, 194 

United States: aid from, 26, 74, 117-18, 
183-84, 186, 242; aid from, suspended, 
xxxvi, 42, 204; businesses controlled 
by, 18; interests of, 12, 13; lawsuit 
against, 118; loans from, xxviii; mili- 
tary assistance from, 18, 22, 26, 195, 
196, 202; military cooperation with, 



214; opposition of, to Sandinistas, 200, 
203; opposition of, to Somoza 
Debayle, 34; opposition of, to Somoza 
Garcia, 27; relations with, 19, 27, 183- 
86; support of, for Chamorro govern- 
ment, 183, 186; support of, for Con- 
tras, xxxii,xxxiii, 3, 47, 204, 206; 
support of, for Somoza family, 25, 29; 
trade embargo by, xxxii, 47, 74, 105, 
109, 114, 116, 117, 131, 183; trade 
with, 116, 117 

United States Agency for International 
Development (AID), 76, 244 

United States Arms Control and Disar- 
mament Agency, 21 3 

United States Central Intelligence 
Agency, 88, 205-6 

United States Foreign Military Sales Pro- 
gram, 214 

United States Department of State 

human rights reports, 223 
United States Good Neighbor Policy, 195 
United States Lend-lease program, 196 
United States Marine Corps: contingent 

force, 20; intervention by, xxvii-xxviii, 

195; withdrawal of, xxviii, xxix, 195, 

196 

United States military interventions, 
xxvii-xxviii, 14, 19-25, 195; opposition 
to, 22 

Universidad de Centroamerica. See Cen- 
tral American University 

Universidad Nacional Autonoma de Nic- 
aragua. See National Autonomous Uni- 
versity of Nicaragua 

universities, 180; budget cuts in, 180; 
enrollment in, 74, 75 

University Autonomy Law (1990), 180 

UNO. See National Opposition Union 

urban areas: birth rate in, 62; employ- 
ment in, 68; health care in, xxxiv; pop- 
ulation in, 60, 62-63, 72; poverty in, 
72; religion in, 85 

urbanization, 61-62, 63 

Urcuyo Maliano, Francisco, 38 

Vanderbilt, Cornelius, 13, 15 

Venezuela: in Group of Three, 249; loan 
from, 118; military assistance from, 
202; petroleum imported from, 138 

Viceroyalty of New Spain, 8 

Vivas Lugo, Rene, xxxvi, 217 



296 



Index 



volcanoes, 55-56 
voting age, 45 

wages, 73, 122-23; minimum, 120 
Walker, William, 194-95; executed, 16; 
exiled, 16, 195; government of, 14-15, 
194; intervention by, 14-16; opposition 
to, 15; struggle to expel, xxvii, 15-16 
War of the Spanish Succession (1701- 
14), 10 

Wheelock Roman, Jaime, 33 

women, 82-84; in armed forces, 201-2; 
and birth control, 82-83; employment 
of, 83, 119; as household heads, 80, 
83; on police force, 217; and religion, 
85; roles of, 82, 83-84; rural, 83; sexual 
activity of, 82-83 

women's associations, xxxii 

workers' associations, xxxii 



Workers' Front (Frente Obrero — FO) , 
122 

work force (see also employment): brain 
drain from, 119-20; composition of, 
119-20; in industry, 125; size of, 119, 
173; turnover in, 122; women in, 83, 
119 

World Bank: banking reform under, 113; 

economic restructuring under, 106; 

loan from, 118, 119, 188, 189 
World Confederation of Labor, 1 73 

Zelaya,Jose Santos, 17; as president, 18 
Zelaya administration, xxvii; accomplish- 
ments of, xxvii, 18, 195; economy 
under, 18, 19; foreign policy of, 18; 
opposition to, xxvii; overthrown, xxvii, 
xxviii, 18, 19; religion under, 84 
Zelaydon, Benjamin, 19-20 



297 



Published Country Studies 



550-65 


Afah?ini<itan 

/ilglldXlloLClll 


550-98 


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550-44 


Algeria 


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El Salvador 



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299 



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5 50-3 7 Rwanda and B urundi 

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550-93 South Africa 

550-95 Soviet Union 



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550-80 Turkey 

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550-32 Vietnam 

550-183 Yemens, The 

550-99 Yugoslavia 

550-67 Zaire 

550-75 Zambia 

550-171 Zimbabwe 



300 



PIN: 004265-000 



